ADVOKS GLOBAL · KENYA
The Capital Markets (Public Offers, Listings and Disclosures) Regulations, 2023
49. Business combinations
Edition: 2023-12-15 · In force
49. Business combinations
(1)Before completion of the business combination, in the event a material change occurs in relation to the profile of the founding shareholders or the management team which may be critical to the successful founding of the issuer or successful completion of the business combination, the issuer shall seek approval of a majority of at least seventy-five per cent of the votes cast by independent shareholders at a general meeting to be convened for the continued listing of the issuer on the Securities Exchange.(2)For the purpose of voting on the continued listing of the issuer under subregulation (1), the founding shareholders, management team, and their associates, shall not be considered to be independent of each other.(3)The Authority may declare a circumstance to be a material change under this regulation.(4)The issuer shall be liquidated where it—(a)fails to complete a business combination within the permitted time frame;(b)fails to obtain specific shareholders’ approval; or(c)is directed to delist by the Authority before the completion of a business combination.(5)The amount held in the escrow account at the time of the liquidation distribution and such other accounts held by the issuer, net of taxes payable and direct expenses related to the liquidation distribution, shall be distributed to shareholders on a pro rata basis as soon as practicable, as permissible by the relevant laws and regulations.(6)Any interest, income derived and deferred underwriting commissions accrued in the escrow account will form part of the liquidation distribution.(7)The founding shareholders, management team, and their associates shall waive their right to participate equally in the liquidation distribution in respect of all equity securities owned or acquired by them prior to or pursuant to the special purpose acquisition company initial public offering and shall only be entitled to participate in such distribution only after the other shareholders have received their relevant share of the liquidation proceed.(8)The underwriters of the special purpose acquisition company initial public offering shall waive their rights to any deferred underwriting commissions deposited in the escrow account in the event the issuer liquidates prior to completion of the business combination.