Shandong Molong Petroleum Machinery Company Limited recently released a comprehensive set of Rules of Procedure for its shareholders’ meetings. According to the announcement, the shareholders’ meeting is confirmed as the highest authority within the corporate governance structure, with powers encompassing the election of directors, approval of profit distribution plans, and significant decisions such as mergers, divisions, and amendments to the Articles of Association.
The announcement highlights specific requirements for convening both annual and extraordinary shareholders’ meetings, detailing circumstances that necessitate an extraordinary meeting, including when shareholders collectively holding at least 10% of the company’s shares request one. The document sets clear standards for meeting notices and record dates, emphasizing that once the record date is fixed, it cannot be changed, and all shareholders registered by that date—whether attending in person or via proxy—are entitled to vote.
The new rules also address the handling of guarantees provided by the company. Guarantees exceeding certain thresholds—such as when they surpass 50% of the net assets—must be reviewed and approved by the board of directors and, in some cases, must also secure approval from the shareholders’ meeting with at least two-thirds of the voting rights of those present. Additionally, the announcement stipulates that any proposed guarantee for shareholders, actual controllers, or related parties requires the affected shareholders to abstain from voting.
Voting procedures, including the adoption of a cumulative voting system for the election of directors, form another major focus. The rules outline how shareholders or their proxies may vote, stress the requirement that related-party shareholders recuse themselves from voting on matters that involve related transactions, and confirm that each share generally carries one vote. The announcement further clarifies how votes should be collected and supervised, mandating that a lawyer and shareholder representatives oversee the process on-site and that online voting options must be available.
Lastly, the document states that the minutes of every shareholders’ meeting must be signed by the directors and the convener or their representatives. These minutes, along with attendance records and proxy documents, will be retained for at least ten years to ensure compliance and facilitate audits.
Shandong Molong Petroleum Machinery’s announcement underlines its commitment to transparent governance and standardized procedures, providing clear guidelines for all shareholders on meeting participation, proposal submissions, and voting requirements. It specifies that upon any proposal’s approval—particularly those addressing matters like cash dividends or conversion of capital reserves—the company will implement all stipulated actions within two months of the meeting’s conclusion.
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