Companies
101
(b) the consent of a person is required under section 45 to
the issue of the prospectus and he either has not given
that consent or has withdrawn it before the issue of the
prospectus,
the directors of the corporation except any without whose knowledge
or consent the prospectus was issued, and any other person who
authorized or caused the issue thereof shall be liable to indemnify
the person so named or whose consent was so required against all
damages, costs and expenses to which he may be made liable by
reason of his name having been inserted in the prospectus or of
the inclusion therein of a statement purporting to be made by him
as an expert, or in defending himself against any action or legal
proceeding brought against him in respect thereof.
Criminal liability for statement in prospectus
47. (1) Where in a prospectus there is any untrue statement or
wilful non-disclosure, any person who authorized or caused the
issue of the prospectus shall be guilty of an offence against this
Act unless he proves either that the statement or non-disclosure
was immaterial or that he had reasonable ground to believe and
did, up to the time of the issue of the prospectus, believe the
statement was true or the non-disclosure immaterial.
Penalty: Imprisonment for *five years or  †one hundred thousand
ringgit.
(2) A person shall not be deemed to have authorized or caused
the issue of a prospectus by reason only of his having given the
consent required by this Division to the inclusion therein of a
statement purporting to be made by him as an expert.
Power of Minister to exempt
47A. (1) Subject to subsection (2) the Minister may, on the
application in writing by any person interested and subject to the
recommendation of the Registrar, by order declare that Division
1 and Division 4 of this Part shall not apply to any person making
an offer of shares or debentures to the public, either unconditionally
or subject to such terms and conditions as the Minister thinks fit
to impose.
*NOTE--Previously "two years"see Companies (Amendment) Act 1985 [Act A616].
NOTE--Previously "thirty thousand ringgit"see Companies (Amendment) (No. 2) Act 1992 [Act A836].
Laws of Malaysia
102
ACT 125
(2) Recommendation shall not be made by the Registrar to the
Minister unless he is of the opinion that circumstances exist
whereby--
(a) the cost of providing a prospectus outweighs the resulting
protection to investors; or
(b) it would not be prejudicial to the public interest if a
prospectus were dispensed with.
Exempted offers
47B. (1) Nothing in Division 1 and Division 4 of this Part shall
apply to an offer of shares or debentures, whether or not they have
been previously issued, made to--
(a) a prescribed corporation;
(b) an insurance company registered under any written law
relating to insurance companies;
(c) a trustee corporation;
(d) a statutory body established by an Act of Parliament or
an Enactment of any State;
(e) a pension fund approved by the Director General of Inland
Revenue under section 150 of the Income Tax Act 1967
[Act 53];
(f) a unit trust scheme as defined under the Securities Industry
Act 1983 [Act 280];
(g) a person licensed as a dealer or investment adviser under
the Securities Industry Act 1983;
(h) a corporation incorporated outside Malaysia;
(i) a public company which is engaged primarily in the making
of investments in marketable securities for the purpose
of revenue and for profit and not for the purpose of
exercising control; and
(j) such other person as the Minister may, by order published
in the Gazette, declare to be exempt purchasers,
who or which pursuant to the offer, acquires the shares or debentures
as principal, trustee or agent for accounts fully managed by him
or it who, for the purposes of this section, shall be deemed to be
dealing as principal.
Companies
103
(2) In this section, the term "prescribed corporation" has the
same meaning as assigned to it in subsection 38(7).
(3) Any information memorandum purporting to describe the
business and affairs of the person making the offer issued by the
said person or his agent shall be deemed to be a prospectus, in so
far as regarding the liability of the person or his agent, for any
untrue statement or non-disclosure of material information and a
copy of the memorandum shall be lodged with the Registrar within
seven days after it is first issued.
DIVISION 2
RESTRICTIONS ON ALLOTMENT AND COMMENCEMENT
OF BUSINESS
Prohibition of allotment unless minimum subscription received
48. (1) No allotment shall be made of any shares of a company
offered to the public or offered for subscription or purchase or
where an invitation to subscribe for or purchase shares is made
pursuant to a prospectus that is registered under the Securities
Commission Act 1993 unless--
(a) the minimum subscription has been subscribed; and
(b) the sum payable on application for the shares so subscribed
has been received by the company,
but if a cheque for the sum payable has been received by the
company, the sum shall be deemed not to have been received by
the company until the cheque is paid by the bank on which it is
drawn.
(2) The minimum subscription shall be--
(a) calculated on the nominal value of each share, and where
the shares are issued at a premium, on the nominal value
of, and the amount of the premium payable on, each
share; and
(b) reckoned exclusively of any amount payable otherwise
than in cash.
Laws of Malaysia
104
ACT 125
(3) The amount payable on application on each share offered
to the public or offered pursuant to a prospectus that is registered
under the Securities Commission Act 1993 shall not be less than
five per centum of the nominal amount of the share.
(4) If the conditions referred to in paragraphs (1)(a) and (b)
have not been satisfied on the expiration of four months after the
first issue of the prospectus, all money received from applicants
for shares shall he forthwith repaid to them without interest, and,
if any such money is not so repaid within five months after the
issue of the prospectus, the directors of the company shall be
jointly and severally liable to repay that money with interest at the
rate of ten per centum per annum from the expiration of the period
of five months but a director shall not be so liable if he proves
that the default in the repayment of the money was not due to any
misconduct or negligence on his part.
( 5 ) A n allotment made by a company to an applicant in
contravention of this section or of subsection 50 (1) shall be
voidable at the option of the applicant which option may be exercised
by written notice served on the company within one month after
the holding of the statutory meeting of the company, and not later,
or, in any case where the company is not required to hold a
statutory meeting, or where the allotment is made after the holding
of the statutory meeting, within one month after the date of the
allotment, and not later, and the allotment shall be so voidable
notwithstanding that the company is in course of being wound up.
(6) Every director of a company who knowingly contravenes or
permits or authorizes the contravention of this section or of subsection
50(1) shall be guilty of an offence against this Act and shall be
liable in addition to the penalty or punishment for the offence to
compensate the company and the allottee respectively for any loss,
damages or costs which the company or the allottee has sustained
or incurred thereby but no proceedings for the recovery of any
such compensation shall be commenced after the expiration of two
years from the date of the allotment.
Penalty: Imprisonment for three years or one million ringgit or
both.
(7) Any condition requiring or binding any applicant for shares
to waive compliance with any requirements of this section shall
be void.
Companies
105
(8) No company shall allot, and no officer or promoter of a
company or a proposed company shall authorize or permit to be
allotted--
(a) any shares or debentures to the public on the basis of a
prospectus after the expiration of six months or such
longer period as the Registrar may allow from the date
of issue of the prospectus; or
(b) any securities as defined under the Securities Commission
Act 1993 on the basis of a prospectus that is registered
under that Act later than such period after the date of
issue of the prospectus as the Securities Commission
may specify.
Penalty: Imprisonment for *three years or one million ringgit.
(9) Where an allotment of--
(a) shares or debentures is made on the basis of a prospectus
after the expiration of six months or such longer period
as the Registrar may allow from the date of issue of the
prospectus; or
(b) securities is made on the basis of a prospectus that is
registered under the Securities Commission Act 1993
later than such period after the date of issue of the prospectus
as the Securities Commission may specify,
the allotment shall not by reason only of that fact be voidable or
void.
Application moneys to be held in trust until allotment
49. (1) All applications and other moneys paid prior to allotment
by any applicant on account of shares or debentures offered to the
public or of any securities for which a prospectus is required under
the Securities Commission Act 1993 shall until the allotment be
held by the company, or in the case of an intended company by
the persons named in the prospectus as proposed directors and by
the promoters, upon trust for the applicant, but there shall be no
obligation or duty on any bank or third person with whom any such
moneys have been deposited to inquire into or see to the proper
application of the moneys so long as the bank or person acts in
good faith.
*NOTE--Previously "three years or ten thousand ringgit"see Companies (Amendment) Act 1986
[Act A657].
Laws of Malaysia
106
ACT 125
(2) If default is made in complying with this section every
officer of the company in default or, in the case of an intended
company, every person named in the prospectus as a proposed
director and every promoter who knowingly and wilfully authorizes
or permits the default shall be guilty of an offence against this Act.
Penalty: Imprisonment for *three years or ten thousand ringgit.
Restriction on allotment in certain cases
50. (1) A public company having a share capital which does not
issue a prospectus on or with reference to its formation shall not
allot any of its shares or debentures unless at least three days
before the first allotment of either shares or debentures there has
been lodged with the Registrar a statement in lieu of prospectus
which complies with the requirements of this Act.
(2) If default is made in complying with this section the company
and every officer of the company who is in default shall be guilty
of an offence against this Act.
Penalty: Imprisonment for *three years or ten thousand ringgit.
Requirements as to statements in lieu of prospectus
51. (1) To comply with the requirements of this Act a statement
in lieu of prospectus lodged by or on behalf of a company--
(a) shall be signed by every person who is named therein as
a director or a proposed director of the company or by
his agent authorized in writing;
(b) shall subject to Part III of the Sixth Schedule, be in the
form of and state the matters specified in Part I of that
Schedule and set out the reports specified in Part II of
that Schedule; and
(c) shall, where the persons making any report specified in
Part II of that Schedule have made therein or have, without
giving the reasons, indicated therein any such adjustments
as are mentioned in paragraph 5 of Part III of that Schedule,
have endorsed thereon or attached thereto a written
s t a t e m e n t signed by those persons setting out the
adjustments and giving the reasons therefor.
*NOTE--Previously "one year or two thousand five hundred ringgit"see Companies (Amendment)
Act 1986 [Act A657].
Companies
107
(2) The Registrar shall not accept for registration any statement
in lieu of prospectus unless it appears to him to comply with this
Act.
(3) Where in any statement in lieu of prospectus, there is any
untrue statement or wilful non-disclosure any director, who signed
the statement in lieu of prospectus shall be guilty of an offence
against this Act unless he proves either that the untrue statement
or non-disclosure was immaterial or that he had reasonable ground
to believe and did, up to the time of the delivery for registration
of the statement in lieu of prospectus, believe that the untrue
statement was true or the non-disclosure immaterial.
Penalty: Imprisonment for *three years or ten thousand ringgit
or both.
Restrictions on commencement of business in certain
circumstances
52. (1) Where a company having a share capital has issued a
prospectus inviting the public to subscribe for its shares or has
issued a prospectus pursuant to the Securities Commission Act
1993 in relation to its shares the company shall not commence any
business or exercise any borrowing powers--
(a) if any money is or may become liable to be repaid to
applicants for any shares or debentures offered for public
subscription by reason of any failure to apply for or
obtain permission for listing for quotation on any Stock
Exchange; or
(b) unless--
(i) shares held subject to the payment of the whole
amount thereof in cash have been allotted to an
amount not less in the whole than the minimum
subscription;
(ii) every director has paid to the company on each
of the shares taken or contracted to be taken by
him, and for which he is liable to pay in cash, a
proportion equal to the proportion payable on
application and allotment on the shares offered
for public subscription; and
*NOTE--Previously "one year or two thousand five hundred ringgit"see Companies (Amendment)
Act 1986 [Act A657].
Laws of Malaysia
108
ACT 125
(iii) there has been lodged with the Registrar a statutory
declaration by the secretary or one of the directors
of the company in the prescribed form verifying
that the above conditions have been complied with.
(2) Where a public company having a share capital has not
issued a prospectus inviting the public to subscribe for its shares
or has not issued a prospectus pursuant to the Securities Commission
Act 1993 the company shall not commence any business or exercise
any borrowing power unless--
(a) there has been lodged with the Registrar a statement in
lieu of prospectus which complies with this Act;
(b) every director of the company has paid to the company
on each of the shares taken or contracted to be taken by
him and for which he is liable to pay in cash, a proportion
equal to the proportion payable on application and allotment
on the shares payable in cash; and
(c) there has been lodged with the Registrar a statutory
declaration by the secretary or one of the directors of the
company in the prescribed form verifying that paragraph
(b) has been complied with.
(3) The Registrar shall, on the lodging of the statutory declaration
in accordance with this section certify that the company is entitled
to commence business and to exercise its borrowing powers and
that certificate shall be conclusive evidence thereof.
(4) Any contract made by a company before the date at which
it is entitled to commence business shall be provisional only and
shall not be binding on the company until that date, and on that
date it shall become binding.
(5) Where shares and debentures are offered simultaneously by
a company for subscription nothing in this section shall prevent
the receipt by the company of any money payable on application
for the debentures.
(6) If any company commences business or exercises borrowing
powers in contravention of this section every person who is
responsible for the contravention shall be guilty of an offence
against this Act.
Companies
109
Penalty: *Ten thousand ringgit. Default penalty: Two hundred
and fifty ringgit.
Restriction on varying contracts referred to in prospectus, etc.
53.  A company shall not before the statutory meeting vary the
terms of a contract referred to in the prospectus or statement in
lieu of prospectus, unless the variation is made subject to the
approval of the statutory meeting.
DIVISION 3
SHARES
Return as to allotments
54. (1) Where a company makes any allotment of its shares or
a n y of its shares are deemed to have been allotted under
subsection (6) the company shall within one month thereafter
lodge with the Registrar a return of the allotments stating--
(a) the number and nominal amounts of the shares comprised
in the allotment;
(b) the amount, if any, paid, deemed to be paid, or due and
payable on the allotment of each share;
(c) where the capital of the company is divided into shares
of different classes, the class of shares to which each
share comprised in the allotment belongs; and
(d) the full name and the address of each of the allottees and
the number and class of shares allotted to him.
(2) The particulars mentioned in paragraph (1)(d) need not be
included in the return where a company to which subsection 166(1)
applies has allotted shares--
(a) for cash; or
(b) for a consideration other than cash and the number of
persons to whom the shares have been allotted exceeds
five hundred.
*NOTE--Previously "one thousand ringgit"see Companies (Amendment) Act 1986 [Act A657].
Laws of Malaysia
110
ACT 125
(3) Where shares are allotted or deemed to have been allotted
as fully or partly paid up otherwise than in cash and the allotment
is made pursuant to a contract in writing, the company shall lodge
with the return the contract evidencing the entitlement of the
allottee or a copy of any such contract certified as prescribed.
(4) If a certified copy of a contract is lodged the original contract
duly stamped shall, if the Registrar so requests, be produced at the
same time to the Registrar.
(5) Where shares are allotted or are deemed to have been allotted
as fully or partly paid up otherwise than in cash and the allotment
is made--
(a) pursuant to a contract not reduced to writing;
(b) pursuant to a provision in the memorandum or articles;
or
(c) in satisfaction of a dividend declared in favour of, but not
payable in cash to the shareholders, or in pursuance of
the application of moneys held by the company in an
account or reserve in paying up unissued shares to which
the shareholders have become entitled,
the company shall lodge with the return a statement containing
such particulars as are prescribed but where the shares are allotted
pursuant to a scheme of arrangement approved by the Court under
section 176 the company may lodge an office copy of the order
of the Court in lieu of the statement in the prescribed form.
(6) For the purposes of this section any shares issued without
formal allotment to subscribers to the memorandum shall be deemed
to have been allotted to the subscribers on the date of the incorporation
of the company.
(7) If default is made in complying with this section every
officer of the company who is in default shall be guilty of an
offence against this Act.
Penalty: One thousand ringgit. Default penalty: Two hundred
and fifty ringgit.
Companies
111
As to voting rights of equity shares in certain companies
55. (1) Notwithstanding any provisions in this Act or in the
memorandum or articles of a company to which this section applies,
each equity share issued by such a company after the commencement
of this Act shall confer the right at a poll at any general meeting
of the company (subject as provided in subsection 148(1)) to one
vote, and, to one vote only for each ringgit or part of a ringgit that
has been paid up on that share.
(2) Where any company to which this section applies has, prior
to the commencement of this Act, or, while it was a company to
which this section did not apply, issued any equity share which
does not comply with subsection (1), the company shall not issue
any invitation to subscribe for or to purchase any shares or debentures
of the company until the voting rights attached to each share of
t h a t company have been duly varied so as to comply with
subsection (1).
(3) For the purposes of this section any alteration of the rights
of issued preference shares so that they become equity shares shall
be deemed to be an issue of equity shares.
(4) The Yang di-Pertuan Agong may by proclamation published
in the Gazette declare that subsection (1) shall apply to all or any
equity shares or any class of equity shares which have been issued
before the commencement of this Act by a company to which this
section applies and which is specified in the declaration and thereupon
that subsection shall apply to such equity shares so issued by the
company from such date as is specified in the declaration being
a date not less than one year after the making of the proclamation.
(5) This section applies to--
(a) a public company having a share capital; and
(b) a subsidiary of such a public company.
(6) A person shall not make any invitation to the public in
breach of subsection (2).
Penalty: Imprisonment for *five years or thirty thousand ringgit.
*NOTE--Previously "two years or five thousand ringgit"see Companies (Amendment) Act 1986
[Act A657].
Laws of Malaysia
112
ACT 125
Differences in calls and payments, etc.
56. (1) A company if so authorized by its articles may--
(a) make arrangements on the issue of shares for varying the
amounts and times of payment of calls as between
shareholders;
(b) accept from any member the whole or a part of the amount
remaining unpaid on any shares although no part of that
amount has been called up; and
(c) pay dividends in proportion to the amount paid up on
each share where a larger amount is paid up on some
shares than on others.
Reserve liability
(2) A limited company may by special resolution determine
that any portion of its share capital which has not been already
called up shall not be capable of being called up except in the
event and for the purposes of the company being wound up, and
thereupon that portion of its share capital shall not be capable of
being called up except in the event and for the purposes of the
company being wound up, but no such resolution shall prejudice
the rights of any person acquired before the passing of the resolution.
Share warrants
57. (1) A company shall not issue any share warrant stating that
the bearer of the warrant is entitled to the shares therein specified
and which enables the shares to be transferred by delivery of the
warrant.
(2) The bearer of a share warrant issued before the commencement
of this Act shall be entitled, on surrendering it for cancellation to
have his name entered in the register of members.
(3) The company shall be responsible for any loss incurred by
any person by reason of the company entering in the register the
name of a bearer of a share warrant issued before the commencement
of this Act in respect of the shares therein specified without the
warrant being surrendered and cancelled.
Companies
113
Power to pay certain commissions, and prohibition of payment
of all other commissions, discounts, etc.
58. (1) A company may pay a commission to any person in
consideration of his subscribing or agreeing to subscribe whether
absolutely or conditionally for any shares, or procuring or agreeing
to procure subscriptions, whether absolute or conditional, for any
shares in the company, if --
(a) the payment is authorized by the articles;
(b) the commission does not exceed ten per centum of the
price at which the shares are issued or the amount or rate
authorized by the articles, whichever is the less;
(c) the amount or rate of the commission is--
(i) in the case of shares of an unlisted recreational
club which are offered to the public for subscription
or in the case of shares other than of an unlisted
recreational club which are offered for subscription
o r purchase pursuant to a prospectus that is
registered under the Securities Commission Act
1993, disclosed in the prospectus; and
(ii) in the case of shares not so offered, disclosed in
the statement in lieu of prospectus, or in a statement
in the prescribed form signed in like manner as a
statement in lieu of prospectus and lodged before
the payment of the commission with the Registrar,
and, where a circular or notice not being a prospectus
inviting subscription for the shares is issued, also
disclosed in that circular or notice; and
(d) the number of shares which persons have agreed for a
commission to subscribe absolutely is disclosed in the
like manner.
(2) Except as provided in subsection (1) no company shall apply
any of its shares or capital money either directly or indirectly in
payment of any commission, discount or allowance to any person
in consideration of his subscribing or agreeing to subscribe whether
absolutely or conditionally for any shares or procuring or agreeing
to procure subscriptions whether absolute or conditional for any
shares in the company, whether the shares or money are so applied
by being added to the purchase money of any property acquired
by the company or to the contract price of any work to be executed
for the company, or the money is paid out of the nominal purchase
money or contract price or otherwise.
Laws of Malaysia
114
ACT 125
(3) Nothing in this section shall affect the power of any company
to pay such brokerage (in addition to or in lieu of the commission
referred to in subsection (1)) as it has heretofore been lawful for
company to pay but the amount or rate per centum of the brokerage
paid or agreed to be paid by the company shall (in the case of
shares of an unlisted recreational club which are offered to the
public for subscription or in the case of shares other than of an
unlisted recreational club which are offered for subscription or
purchase pursuant to a prospectus that is registered under the
Securities Commission Act 1993) be disclosed in the prospectus
or in the statement in lieu of prospectus (if applicable) or in a
statement in the prescribed form signed in like manner as a statement
in lieu of prospectus and lodged before the payment of the brokerage
with the Registrar, and, where a circular or notice not being a
prospectus inviting subscription for the shares is issued, also disclosed
in that circular or notice.
(4) A vendor to, promoter of, or other person who receives
payment in money or shares from, a company shall have power
to apply any part of the money or shares so received in payment
of any commission the payment of which if made directly by the
company would have been lawful under this section.
(5) If default is made in complying with the provisions of this
section relating to the lodging with the Registrar of the statement
in the prescribed form, the company and every officer of the
company who is in default shall be guilty of an offence against
this Act.
Penalty: *One thousand ringgit. Default penalty.
Power to issue shares at a discount
59. (1) Subject to this section a company may issue shares at a
discount of a class already issued if--
(a) the issue of the shares at a discount is authorized by
resolution passed in general meeting of the company, and
is confirmed by order of the Court;
(b) the resolution specifies the maximum rate of discount at
which the shares are to be issued;
(c) at the date of the issue not less than one year has elapsed
since the date on which the company was entitled to
commence business; and
*NOTE--Previously "two hundred and fifty ringgit"see Companies (Amendment) Act 1986
[Act A657].
Companies
115
(d) the shares are issued within one month after the date on
which the issue is confirmed by order of the Court or
within such extended time as the Court allows.
(2) The Court, if having regard to all the circumstances of the
case it thinks proper to do so, may make an order confirming the
issue on such terms and conditions as it thinks fit.
(3) Every prospectus relating to the issue of the shares shall
contain particulars of the discount allowed or of so much of that
discount as has not been written off at the date of the issue of the
prospectus.
(4) Notwithstanding any provision of its articles, a company
shall not issue at a discount shares of any class unless it first offers
the shares to every holder of shares of that class in the company
proportionately to the number of those shares held by him.
(5) Every such offer shall be made by notice specifying the
number of shares to which the member is entitled and limiting a
time not being less than twenty-one days within which the offer
may be accepted.
(6) If any such offer is not accepted within the time limited by
the notice the shares may be issued on terms not more favourable
than those offered to the shareholders.
(7) If default is made in complying with this section, the company
and every officer of the company who is in default shall be guilty
of an offence against this Act.
Penalty: *One thousand ringgit. Default penalty.
Issue of shares at a premium
60. (1) In this section--
"arrangement" means any agreement, scheme or arrangement
(including an arrangement sanctioned in accordance with section
176 or 270);
"company" except in references to the issuing company, includes
any body corporate;
*NOTE--Previously "two hundred and fifty ringgit"see Companies (Amendment) Act 1986
[Act A657].
Laws of Malaysia
116
ACT 125
"equity share capital" means, in relation to a company, its issued
share capital excluding any part thereof which neither as respects
dividends nor as respects capital, carries any right to participate
beyond a specified amount in a distribution;
"equity shares" means shares comprised in a company's equity
share capital;
"issuing company" means the company issuing the shares in the
circumstances referred to in this section;
"minimum premium value" means the amount, if any, by which
the base value of the shares transferred exceeds the aggregate
nominal value of the shares allotted in consideration for the transfer;
"non-equity shares" means shares of any class not comprised in
a company's equity share capital.
Share premium account
(2) Where a company issues shares for which a premium is
received by the company whether in cash or in the form of other
valuable consideration a sum equal to the aggregate amount or
value of the premiums on those shares shall be transferred to an
account called the "share premium account" and the provisions of
this Act relating to the reduction of the share capital of a company
shall subject to this section apply as if the share premium account
were paid-up share capital of the company.
(3) The share premium account may be applied--
(a) in paying up unissued shares to be issued to members of
the company as fully paid bonus shares;
(b) in paying up in whole or in part the balance unpaid on
shares previously issued to members of the company;
(c) in the payment of dividends if such dividends are satisfied
by the issue of shares to members of the company;
(d) in the case of a company which carries on insurance
business in Malaysia, by appropriation or transfer to any
statutory fund established and maintained pursuant to
any law of Malaysia relating to insurance;
Companies
117
(e) in writing off--
(i) the preliminary expenses of the company; or
(ii) the expenses of, or the commission or brokerage
paid or discount allowed on, any duty, fee or tax
payable on or in connection with, and issue of
shares of the company; or
(f) in providing for the premium payable on redemption of
redeemable preference shares.
Merger relief
(4) (a) Subsection (2) shall not apply--
(i) where an issuing company has secured at least ninety
per centum equity holding in another company in
pursuance of any arrangement providing for the
allotment of equity shares issued at a premium in
the issuing company on terms that the consideration
for the shares allotted is to be provided by the issue
or transfer to the issuing company of equity shares
in that other company or by the cancellation of any
such shares not held by the issuing company; and
(ii) where the arrangement also provides for the allotment
of any shares in the issuing company on terms that
the consideration for those shares is to be provided
by the issue or transfer to the issuing company of
non-equity shares in the other company or by the
cancellation of any such shares in that company
not held by the issuing company.
(b) Subject to paragraph (c), the issuing company shall be
regarded for the purposes of this subsection as having
secured at least ninety per centum equity holding in another
company in pursuance of any such arrangement as is
mentioned in paragraph (a), if, in consequence of any
acquisition or cancellation of equity shares in that company
in pursuance of that arrangement it holds equity shares
in that company (whether all or any of those shares were
acquired in pursuance of that arrangement or not) of an
aggregate nominal value equal to ninety per centum or
more of the nominal value of the company's equity share
capital.
Laws of Malaysia
118
ACT 125
(c) Where the equity share capital of the other company in
question is divided into different classes of shares this
subsection shall not apply unless the requirements of
paragraph (a) above are satisfied in relation to each of
those classes taken separately.
(d) Shares held by a company which is the issuing company's
holding company or subsidiary of the issuing company's
holding company, or by its or their trustees, shall be
regarded for the purposes of this subsection as held by
the issuing company.
(5) (a) Where the issuing company--
(i) is a wholly-owned subsidiary of another company
(the holding company); and
(ii) allots shares to the holding company or to another
wholly-owned subsidiary of the holding company
in consideration for the transfer to the issuing
company of assets, other than cash, being assets of
any company (the transferor company) which is a
member of the group of companies which comprises
the holding company and all its wholly-owned
subsidiaries,
the issuing company shall not be required by subsection (2) to
transfer any amount in excess of the minimum premium value to
the share premium account where the shares in the issuing company
allotted in consideration for the transfer are issued at a premium.
(b) In paragraph (a), "the minimum premium value" means the
amount, if any, by which the base value of the consideration for
the shares allotted exceeds the aggregate nominal value of those
shares.
(c) For the purposes of paragraph (b), the base value of the
consideration for the shares allotted shall be the amount by which
the base value of assets transferred exceeds the base value of any
liabilities of the transferor company assumed by the issuing company
as part of the consideration for the assets transferred.
Companies
119
(d) For the purposes of paragraph (c)--
(i) the base value of the assets transferred shall be taken
as the cost of those assets to the transferor company
or the amount at which those assets are stated in the
transferor company's accounting records immediately
before the transfer, whichever is the less; and
(ii) the base value of the liabilities assumed shall be
taken as the amount at which they are stated in the
transferor company's accounting records immediately
before the transfer.
(e) Subsection (4) shall not apply in any case to which this
subsection applies.
Restrospective relief in certain circumstances
(6) (a) Subject to paragraph (b), where--
(i) the issuing company has issued at a premium shares
which were allotted in pursuance of any arrangement
providing for the allotment of shares in the issuing
company on terms that the consideration for the shares
allotted was to be provided by the issue or transfer
to the issuing company of shares in another company
or by the cancellation of any shares in that other
company not held by the issuing company; and
(ii) that other company must either have been, at the time
of the arrangement, a subsidiary of the issuing company
o r of any company which was then the issuing
company's holding company or have become such a
subsidiary on the acquisition or cancellation of its
shares in pursuance of the arrangement,
any part of the premiums on the shares so issued which was not
transferred to the company's share premium account in accordance
with subsection (2) shall be treated as if subsection (2) had never
applied to those premiums (and may accordingly be disregarded
in determining the sum to be included in the company's share
premium account).
Laws of Malaysia
120
ACT 125
(b) This subsection applies only where a company has issued
shares in circumstances to which the subsection applies before the
coming into operation of the subsection.
(7) (a) An amount corresponding to any amount representing
the premiums or part of the premiums on shares issued by a
company which by virtue of subsection (4), (5) or (6) is not included
in the company's share premium account may also be disregarded
in determining the amount at which any shares or other consideration
provided for the shares issued is to be included in the company's
balance-sheet.
(b) References in subsections (4) to (6) and in this subsection
(however expressed) to--
(i) the acquisition by any company of shares in another
company; and
(ii) the issue or allotment of shares to or the transfer of
shares to or by any company,
include references respectively to the acquisition of any of those
shares by and to the issue or allotment or (as the case may require)
the transfer of any of those shares to or by trustees of that company;
and the reference in subparagraph (5)(b)(i) to the company transferring
the shares there-mentioned shall be construed accordingly.
(c) References in subsections (4) to (6) and in this subsection
to the transfer of shares in a company include references to the
transfer of right to be included in the company's register of members
in respect of those shares.
(8) Regulations may be made making provision for and in relation
to--
(i) relief from the requirement of subsection (2) in relation
to premium other than cash premium; or
(ii) restrictions or modification of any relief from those
requirements provided by subsections (4) to (7).
Redeemable preference shares
61. (1) Subject to this section a company having a share capital
may, if so authorized by its articles, issue preference shares which
are, or at the option of the company are to be, liable to be redeemed
and the redemption shall be effected only on such terms and in
such manner as is provided by the articles.
Companies
121
(2) The redemption shall not be taken as reducing the amount
of authorized share capital of the company.
(3) The shares shall not be redeemed--
(a) except out of profits which would otherwise be available
for dividend, or out of the proceeds of a fresh issue of
shares made for the purposes of the redemption; and
(b) unless they are fully paid up.
(4) The premium, if any, payable on redemption shall be provided
for out of profits or the share premium account before the shares
are redeemed.
(5) Where any such shares are redeemed otherwise than out of
the proceeds of a fresh issue, there shall, out of profits which
would otherwise have been available for dividend, be transferred
to a reserve called the "capital redemption reserve" a sum equal
to the nominal amount of the shares redeemed, and the provisions
of this Act relating to the reduction of the share capital of a
company shall, except as provided in this section, apply as if the
capital redemption reserve were paid-up share capital of the company.
(6) Where in pursuance of this section a company has redeemed
or is about to redeem any preferences shares, it may issue shares
up to the nominal amount of the shares redeemed or to be redeemed
as if those shares had never been issued, and accordingly the share
capital of the company shall not for the purposes of any fee under
this Act be deemed to be increased by such issue but where new
shares are issued before the redemption of the old shares, the new
shares shall not, so far as relates to any fee under this Act, be
deemed to have been issued in pursuance of this subsection unless
the old shares have been redeemed within one month after the
issue of the new shares.
(7) The capital redemption reserve may be applied in paying up
unissued shares of the company to be issued to members of the
company as fully paid bonus shares.
(8) If a company redeems any redeemable preference shares it
shall within fourteen days after so doing give notice thereof to the
Registrar specifying the shares redeemed.
Laws of Malaysia
122
ACT 125
Power of company to alter its share capital
62. (1) A company if so authorized by its articles may in general
meeting alter the conditions of its memorandum in any one or
more of the following ways:
(a) increase its share capital by the creation of new shares
of such amount as it thinks expedient;
(b) consolidate and divide all or any of its share capital into
shares of larger amount than its existing shares;
(c) convert all or any of its paid-up shares into stock and re-
convert that stock into paid-up shares of any denomination;
(d) subdivide its shares or any of them into shares of smaller
amount than is fixed by the memorandum, so however
that in the subdivision the proportion between the amount
paid and the amount, if any, unpaid on each reduced
share shall be the same as it was in the case of the share
from which the reduced share is derived; or
(e) cancel shares which at the date of the passing of the
resolution in that behalf have not been taken or agreed
to be taken by any person and diminish the amount of
its share capital by the amount of the shares so cancelled.
Cancellations
(2) A cancellation of shares under this section shall not be
deemed to be a reduction of share capital within the meaning of
this Act.
As to share capital of unlimited company on re-registration
(3) An unlimited company having a share capital may by any
resolution passed for the purposes of subsection 25(1)--
(a) increase the nominal amount of its share capital by
increasing the nominal amount of each of its shares, but
subject to the condition that no part of the increased
capital shall be capable of being called up except in the
event and for the purposes of the company being wound
up; and
Companies
123
(b) in addition or alternatively, provide that a specified portion
of its uncalled share capital shall not be capable of being
called up except in the event and for the purposes of the
company being wound up.
Notice of increase of share capital
(4) Where a company has increased its share capital beyond the
registered capital, it shall within fourteen days after the passing
of the resolution authorizing the increase lodge with the Registrar
notice of the increase.
(5) If any company fails to comply with subsection (4) the
company and every officer of the company who is in default shall
be guilty of an offence against this Act.
Penalty: *One thousand ringgit. Default penalty.
Validation of shares improperly issued
63.  Where a company has purported to issue or allot shares and
the creation, issue or allotment of those shares was invalid by
reason of any provision of this or any other written law or of the
memorandum or articles of the company or otherwise or the terms
of issue or allotment were inconsistent with or unauthorized by
any such provision the Court may, upon application made by the
company or by a holder or mortgagee of any of those shares or
by a creditor of the company and upon being satisfied that in all
the circumstances it is just and equitable so to do, make an order
validating the issue or allotment of those shares or confirming the
terms of issue or allotment thereof or both and upon an office copy
of the order being lodged with the Registrar those shares shall be
deemed to have been validly issued or allotted upon the terms of
the issue or allotment thereof.
Special resolution for reduction of share capital
64. (1) Subject to confirmation by the Court a company may, if
so authorized by its articles, by special resolution reduce its share
capital in any way and in particular, without limiting the generality
of the foregoing, may do all or any of the following:
(a) extinguish or reduce the liability on any of its shares in
respect of share capital not paid-up;
*NOTE--Previously "two hundred and fifty ringgit"see Companies (Amendment) Act 1985
[Act A657].
Laws of Malaysia
124
ACT 125
(b) cancel any paid-up share capital which is lost or
unrepresented by available assets; or
(c) pay off any paid-up share capital which is in excess of
the needs of the company,
and may so far as necessary alter its memorandum by reducing the
amount of its share capital and of its shares accordingly.
(2) Where the proposed reduction of share capital involves either
diminution of liability in respect of unpaid share capital or the
payment to any shareholder of any paid-up share capital, and in
any other case if the Court so directs--
(a) every creditor of the company who at the date fixed by
the Court is entitled to any debt or claim which, if that
date were the commencement of the winding up of the
company, would be admissible in proof against the company
shall be entitled to object to the reduction;
(b) the Court, unless satisfied on affidavit that there are no
such creditors, shall settle a list of creditors so entitled
to object and for that purpose shall ascertain as far as
possible without requiring an application from any creditor
the names of those creditors and the nature and amount
of their debts or claims, and may publish notices fixing
a final day on or before which creditors not entered on
the list may claim to be so entered; and
(c) where a creditor entered on the list whose debt or claim
is not discharged or has not determined does not consent
to the reduction, the Court may dispense with the consent
of that creditor on the company securing payment of his
debt or claim by appropriating as the Court directs--
(i) if the company admits the full amount of the debt
or claim or though not admitting it is willing to
provide for it, the full amount of the debt or claim;
or
(ii) if the company does not admit and is not willing
to provide for the full amount of the debt or claim
or if the amount is contingent or not ascertained,
an amount fixed by the Court after the like inquiry
and adjudication as if the company were being
wound up by the Court.
Companies
125
(3) Notwithstanding subsection (2) the Court may, having regard
to any special circumstances of any case, direct that all or any of
the provisions of that subsection shall not apply as regards any
class of creditors.
(4) The Court, if satisfied with respect to every creditor who
under subsection (2) is entitled to object, that either his consent
to the reduction has been obtained or his debt or claim has been
discharged or has determined or has been secured may make an
order confirming the reduction on such terms and conditions as it
thinks fit.
(5) An order made under subsection (4) shall show the amount
of the share capital of the company as altered by the order, the
number of shares into which it is to be divided and the amount
of each share and the amount, if any, at the date of the order
deemed to be paid up on each share.
(6) On the lodging of an office copy of the order with the
Registrar the resolution for reducting share capital as confirmed
by the order so lodged shall take effect.
(7) The certificate of the Registrar shall be conclusive evidence
that all the requirements of this Act with respect to reduction of
share capital have been complied with and that the share capital
of the company is such as is stated in the order.
(8) On the lodging of the copy of the order the particulars
shown in the order pursuant to subsection (5) shall be deemed to
be substituted for the corresponding particulars in the memorandum
and such substitution and any addition ordered by the Court to be
made to the name of the company shall (in the case of any addition
to the name, for such period as is specified in the order of the
Court) be deemed to be alterations of the memorandum for the
purposes of this Act.
(9) A member, past or present, shall not be liable in respect of
any share to any call or contribution exceeding in amount the
difference, if any, between the amount of the share as fixed by the
order and the amount paid, or the reduced amount, if any, which
is to be deemed to have been paid, on the share (as the case may
be) but where any creditor entitled to object to the reduction is,
Laws of Malaysia
126
ACT 125
by reason of his ignorance of the proceedings for reduction or of
their nature and effect with respect to his claim, not entered on
the list of creditors, and after the reduction the company is unable,
within the meaning of the provisions of this Act with respect to
winding up by the Court, to pay the amount of his debt or claim--
(a) every person who was a member of the company at the
date of the lodging of the copy of the order for reduction
shall be liable to contribute for the payment of that debt
or claim an amount not exceeding the amount which he
would have been liable to contribute if the company has
commenced to be wound up on the day before the said
date; and
(b) if the company is wound up the Court, on the application
of any such creditor and proof of his ignorance of the
proceedings for reduction or of their nature and effect
with respect to his claim may, if it thinks fit settle
accordingly a list of persons so liable to contribute, and
make and enforce calls and orders on the contributories
settled on the list as if they were ordinary contributories
in a winding up,
b u t nothing in this subsection shall affect the rights of the
contributories among themselves.
(10) Every officer of the company who--
(a) wilfully conceals the name of any creditor entitled to
object to the reduction;
(b) wilfully misrepresents the nature of amount of the debt
or claim of any creditor; or
(c) aids, abets or is privy to any such concealment or
misrepresentation,
shall be guilty of an offence against this Act.
Penalty: Imprisonment for *five years or thirty thousand ringgit.
(11) This section shall not apply to an unlimited company, but
nothing in this Act shall preclude an unlimited company from
reducing in any way its share capital, including any amount in its
share premium account.
*NOTE--Previously "three years or seven thousand five hundred ringgit"see Companies (Amendment)
Act 1986 [Act A657].
Companies
127
Rights of holders of classes of shares
65. (1) If in the case of a company the share capital of which is
divided into different classes of shares provision is made by the
memorandum or articles for authorizing the variation or abrogation
of the rights attached to any class of shares in the company,
subject to the consent of any specified proportion of the holders
of the issued shares of that class or the sanction of a resolution
passed at a separate meeting of the holders of those shares, and
in pursuance of the said provision the rights attached to any such
class of shares are at any time varied or abrogated the holders of
not less in the aggregate than ten per centum of the issued shares
of that class, may apply to the Court to have the variation or
abrogation cancelled, and, if any such application is made, the
variation or abrogation shall not have effect until confirmed by the
Court.
(2) An application shall not be invalid by reason of the applicants
or any of them having consented to or voted in favour of the
resolution for the variation or abrogation if the Court is satisfied
that any material fact was not disclosed by the company to those
applicants before they so consented or voted.
(3) The application shall be made within one month after the
date on which the consent was given or the resolution was passed
or such further time as the Court allows, and may be made on
behalf of the shareholders entitled to make the application by such
one or more of their number as they appoint in writing.
(4) On the application the Court, after hearing the applicant and
any other persons who apply to the Court to be heard and appear
to the Court to be interested, may, if satisfied having regard to all
the circumstances of the case that the variation or abrogation
would unfairly prejudice the shareholders of the class represented
by the applicant, disallow the variation or abrogation as the case
may be and shall, if not so satisfied, confirm it, and the decision
of the Court shall be final.
(5) The company shall within fourteen days after the making of
an order by the Court on any such application lodge an office copy
of the order with the Registrar and if default is made in complying
with this provision the company and every officer of the company
who is in default shall be guilty of an offence against this Act.
Penalty: *Two thousand ringgit. Default penalty.
*NOTE--Previously "five hundred ringgit"see Companies (Amendment) Act 1986 [Act A657].
Laws of Malaysia
128
ACT 125
(6) The issue by a company of preference shares ranking pari
passu with existing preference shares issued by the company shall
be deemed to be a variation of the rights attached to those existing
preference shares unless the issue of the first-mentioned shares
was authorized by the terms of issue of the existing preference
shares or by the articles of the company in force at the time the
existing preference shares were issued.
(7) For the purposes of this section the alteration of any provision
in the memorandum or articles of a company which affects or
relates to the manner in which the rights attaching to the shares
of any class may be varied or abrogated shall be deemed to be a
variation or abrogation of the rights attached to the shares of that
class.
(8) This section shall not operate so as to limit or derogate from
the rights of any person to obtain relief under section 181.
Rights of holders of preference shares to be set out in
memorandum or articles
66. (1) No company shall allot any preference shares or convert
any issued shares into preference shares unless there is set out in
its memorandum or articles the rights of the holders of those
shares with respect to repayment of capital, participation in surplus
assets and profits, cumulative or non-cumulative dividends, voting,
and priority of payment of capital and dividend in relation to other
shares or other classes of preference shares.
(2) If default is made in complying with this section the company
and every officer of the company who is in default shall be guilty
of an offence against this Act.
Penalty: *Two thousand ringgit.
Dealing by a company in its own shares, etc.
67. (1) Except as is otherwise expressly provided by this Act no
company shall give, whether directly or indirectly and whether by
means of a loan, guarantee or the provision of security or otherwise,
*NOTE--Previously "five hundred ringgit"see Companies (Amendment) Act 1986 [Act A657].
Companies
129
any financial assistance for the purpose of or in connection with
a purchase or subscription made or to be made by any person of
or for any shares in the company or, where the company is a
subsidiary, in its holding company or in any way purchase, deal
in or lend money on its own shares.
(2) Nothing in subsection (1) shall prohibit--
(a) where the lending of money is part of the ordinary business
of a company, the lending of money by the company in
the ordinary course of its business;
(b) the provision by a company, in accordance with any
scheme for the time being in force, of money for the
purchase of or subscription for fully-paid shares in the
company or its holding company, being a purchase or
subscription by trustees of or for shares to be held by or
for the benefit of employees of the company or a subsidiary
of the company, including any director holding a salaried
employment or office in the company or a subsidiary of
the company; or
(c) the giving of financial assistance by a company to persons,
other than directors, bona fide in the employment of the
company or of a subsidiary of the company with a view
to enabling those persons to purchase fully-paid shares
in the company or its holding company to be held by
themselves by way of beneficial ownership.
(3) If there is any contravention of this section, the company
is, notwithstanding section 369, not guilty of an offence but each
officer who is in default shall be guilty of an offence against this
Act.
Penalty: Imprisonment for *five years or one hundred thousand
ringgit or both.
(4) Where a person is convicted of an offence under subsection
(3) and the Court, by which he is convicted is satisfied that the
company or another person has suffered loss or damage as a result
of the contravention that constituted the offence, the Court may,
in addition to imposing a penalty under that subsection, order the
convicted person to pay compensation to the company or the person,
as the case may be, of such amount as the Court specifies, and any
such order may be enforced as if it were a judgment of the Court.
*NOTE--Previously "two years or ten thousand ringgit"see Companies (Amendment) (No. 2) Act
1992 [Act A836].
Laws of Malaysia
130
ACT 125
(5) The power of a Court under section 354 to relieve a person
to whom that section applies, wholly or partly and on such terms
as the Court thinks fit, from a liability referred to in that section,
extends to relieving a person against whom an order may be made
under subsection (4) from the liability to have such an order made
against him.
(6) Nothing in this section shall operate to prevent the company
or any person from recovering the amount of any loan made in
contravention of this section or any amount for which it becomes
liable, either on account of any financial assistance given, or under
any guarantee entered into or in respect of any security provided,
in contravention of this section.
Purchase by a company of its own shares, etc.
67A. (1) Notwithstanding section 67, a public company with a share
capital may, if so authorized by its articles, purchase its own shares.
(2) A company shall not purchase its own shares unless--
(a) it is solvent at the date of the purchase and will not
become insolvent by incurring the debts involved in the
obligation to pay for the shares so purchased;
(b) the purchase is made through the Stock Exchange on
which the shares of the company are quoted and in
accordance with the relevant rules of the Stock Exchange;
and
(c) the purchase is made in good faith and in the interests
of the company.
(3) Notwithstanding section 60, the company may apply its
share premium account to provide the consideration for the purchase
of its own shares.
(3A) Where a company has purchased its own shares, the directors
of the company may resolve--
(a) to cancel the shares so purchased;
(b) to retain the shares so purchased in treasury (in this Act
referred to as "treasury shares"); or
(c) to retain part of the shares so purchased as treasury shares
and cancel the remainder.
Companies
131
(3B) The directors of the company may--
(a) distribute the treasury shares as dividends to shareholders,
such dividends to be known as "share dividends"; or
(b) resell the treasury shares on the market of the Stock
Exchange on which the shares are quoted, in accordance
with the relevant rules of the Stock Exchange.
(3C) While the shares are held as treasury shares, the rights
attached to them as to voting, dividends and participation in other
distribution and otherwise are suspended and the treasury shares
shall not be taken into account in calculating the number or percentage
of shares or of a class of shares in the company for any purposes
including, without limiting the generality of this provision, the
provisions of any law or requirements of the articles of association
of the company or the listing rules of a Stock Exchange on substantial
shareholding, takeovers, notices, the requisitioning of meetings,
the quorum for a meeting and the result of a vote on a resolution
at a meeting.
(3D) Where the directors decide to distribute the treasury shares
as share dividends, the costs of the shares on the original purchase
shall be applied in the reduction of either the share premium
account or the funds otherwise available for distribution as dividends
or both.
(3E) Where the directors resolve to cancel the shares so purchased,
or cancel any treasury shares, the issued capital of the company
shall be diminished by the shares so cancelled and the amount by
which the company's issued capital is diminished shall be transferred
to the capital redemption reserve.
(4) The capital redemption reserve may be applied in paying up
unissued shares of the company to be issued to members of the
company as fully paid bonus shares.
(5) A cancellation of shares made pursuant to subsection (3E)
shall not be deemed to be a reduction of share capital within the
meaning of this Act.
(6) A company shall, within fourteen days after the shares are
purchased, lodge with the Registrar and the Stock Exchange a
notice in the prescribed form.
(7) If default is made in complying with this section, the company,
every officer of the company and any other person or individual
who is in default shall be guilty of an offence against this Act.
Laws of Malaysia
132
ACT 125
Penalty: Imprisonment for five years or one hundred thousand
ringgit or both.
Options over unissued shares
68. (1) An option granted after the commencement of this Act by
a public company which enables any person to take up unissued
shares of the company after a period of ten years has elapsed from
the date on which the option was granted shall be void.
(2) Subsection (1) shall not apply in any case where the holders
of debentures have an option to take up shares of the company by
way of redemption of the debentures.
Register of options to take up unissued shares
68A. (1) A company shall keep a register of options granted to
persons to take up unissued shares in the company.
(2) The company shall, within fourteen days after the grant of
an option to take up unissued shares in the company, enter in the
register the following particulars--
(a) the name, address and the number of the identity card
issued under the National Registration Act 1959 [Act
78], or the passport number or other identification number,
and the nationality of the holder of the option;
(b) the date on which the option was granted;
(c) the number and description of the shares in respect of
which the option was granted;
(d) the period during which, the time at which or the occurrence
upon the happening of which the option may be exercised;
(e) the consideration, if any, for the grant of the option;
(f) the consideration, if any, for the exercise of the option
or the manner in which that consideration is to be
ascertained or determined; and
(g) such other particulars as may be prescribed.
(3) Division 4 of Part V shall apply to a register kept under this
section as if the register was the register of members.
Companies
133
(4) A company shall keep at the place where the register under
this section is kept a copy of every instrument by which an option
to take up unissued shares in the company is granted, and for the
purposes of subsection (3) those copies shall be deemed to be part
of the register.
(5) Failure by the company to comply with any provision in this
section shall not affect any rights in respect of the option.
(6) If default is made in complying with this section, the company
and any officer of the company who is in default shall be guilty
of an offence against this Act.
Penalty: One hundred thousand ringgit. Default penalty: Ten
thousand ringgit.
Power of company to pay interest out of capital in certain cases
69.  Where any shares of a company are issued for the purpose
of raising money to defray the expenses of the construction of any
works or buildings or the provision of any plant which cannot be
made profitable for a long period, the company may pay interest
on so much of such share capital as is for the time being paid up
and charge the interest so paid to capital as part of the cost of the
construction or provision but--
(a) no such payment shall be made unless it is authorized,
by the articles or by special resolution, and is approved
by the Court;
(b) before approving of any such payment, the Court may at
the expense of the company appoint a person to inquire
and report as to the circumstances of the case, and may
require the company to give security for the payment of
the costs of the inquiry;
(c) the payment shall be made only for such period as is
determined by the Court, but in no case extending beyond
a period of twelve months after the works or buildings
have been actually completed or the plant provided;
(d) the rate of interest shall in no case exceed five per centum
per annum or such other rate as is for the time being
prescribed; and
(e) the payment of the interest shall not operate as a reduction
of the amount paid up on the shares in respect of which
it is paid.
Laws of Malaysia
134
ACT 125
Furnishing of information and particulars of shareholding
69A. (1) The Registrar may at any time by notice in writing require
any company, person or individual to furnish all the necessary
information and particulars of any share acquired or held directly
or indirectly either for his own benefit or for any other company,
person or individual and have them verified by statutory declaration.
(2) Any company, person or individual served with such notice
shall within seven days of the receipt of such notice furnish the
Registrar all the necessary information and particulars of any share
so acquired or held and duly verified by statutory declaration.
(3) If default is made in complying with this section the company,
every officer of the company and any other person or individual
who is in default shall be guilty of an offence against this Act.
Penalty: Imprisonment for *three years or one million ringgit.
Default penalty.
DIVISION 3A
SUBSTANTIAL SHAREHOLDINGS
Application and interpretation of Division
69B. (1) This section has effect for the purpose of this Division
but shall not prejudice the operation of any other provision of this
Act.
(2) In this Division a reference to a company is a reference--
(a) to a company all or any of the shares in which are listed
for quotation on the official list of a Stock Exchange as
defined in the Securities Industry Act 1983;
(b) to a public company whose shares are not listed for
quotation on the official list of a Stock Exchange as
defined in the Securities Industry Act 1983;
(c) to a body corporate incorporated in Malaysia, that is for
the time being declared by the Minister, by notification
in the Gazette, to be a company for the purposes of this
Division; or
*NOTE--Previously "one year"see Companies (Amendment) Act 1985 [Act A616].
NOTE--Previously "fifty thousand ringgit"see Companies (Amendment) (No. 2) Act 1998
[Act A1043].
Companies
135
(d) to a body, not being a body corporate, formed in Malaysia
that is for the time being declared by the Minister, by
notification in the Gazette, to be a company for the purposes
of this Division.
(3) The Minister may, by notification in the Gazette, vary or
revoke a notification published under subsection (2).
(4) In relation to a company the whole or a portion of the share
capital of which consists of stock, an interest of a person in any
such stock shall be deemed to be an interest in an issued share in
the company having the same nominal amount as the amount of
that stock and having attached to it the same rights as are attached
to that stock.
(5) A reference in the definition of "voting share" in subsection
4(1) to a body corporate includes a reference to a body referred
to in paragraph (2)(d).
Persons obliged to comply with Division
69C. (1) The obligation to comply with this Division extends to
all natural persons, whether resident in Malaysia or not and whether
Malaysian citizens or not, and to all bodies corporate, whether
incorporated or carrying on business in Malaysia or not.
(2) The provisions of this Division extends to acts done or
omitted to be done outside Malaysia.
Substantial shareholdings and substantial shareholders
69D. (1) For the purposes of this Division, a person has a substantial
shareholding in a company if he has an interest in one or more
voting shares in the company and the nominal amount of that
share, or the aggregate of the nominal amounts of those shares,
is not less than five per centum of the aggregate of the nominal
amounts of all the voting shares in the company.
(2) For the purposes of this Division, a person has a substantial
shareholding in a company, being a company the share capital of
which is divided into two or more classes of the shares, if he has
an interest in one or more voting shares included in one of those
classes and the nominal amount of that share, or the aggregate of
Laws of Malaysia
136
ACT 125
the nominal amounts of those shares, is not less than five per
centum of the aggregate of the nominal amounts of all the voting
shares included in that class.
(3) For the purposes of this Division, a person who has a substantial
shareholding in a company is a substantial shareholder in that
company.
Substantial shareholder to notify company of his interests
69E. (1) A person who is a substantial shareholder in a company
shall give notice in writing to the company stating his name,
nationality and address and full particulars of the voting shares in
the company in which he has an interest (including, unless the
interest cannot be related to a particular share, the name of the
person who is registered as the holder) and full particulars of each
such interest and of the circumstances by reason of which he has
that interest.
(2) The notice shall be given--
(a) if the person was a substantial shareholder on the date
on which this Division came into operation--within one
month after that date; or
(b) if the person became a substantial shareholder after that
date--within seven days after becoming a substantial
shareholder.
(3) The notice shall be so given notwithstanding that the person
has ceased to be a substantial shareholder before the expiration of
whichever period referred to in subsection (2) is applicable.
Substantial shareholder to notify company of change in his
interests
69F. (1) Where there is a change in the interest of a substantial
shareholder in a company in voting shares in the company, he shall
give notice in writing to the company stating his name and full
particulars of the change, including the date of the change, and the
circumstances by reason of which that change has occurred.
(2) The notice shall be given within seven days after the date
of the change.
Companies
137
(3) For the purposes of subsection (1) where a substantial
shareholder in a company acquires or disposes of voting shares in
the company, there shall be deemed to be a change in the interest
of the substantial shareholder in voting shares in that company.
Person who ceases to be substantial shareholder to notify company
69G. (1) A person who ceases to be a substantial shareholder in
a company shall give notice in writing to the company stating his
name and the date on which he ceased to be a substantial shareholder
and full particulars of the circumstances by reason of which he
ceased to be a substantial shareholder.
(2) The notice shall be given within seven days after the person
ceased to be a substantial shareholder.
References to operation of section 6A
69H.  The circumstances required to be stated in a notice under
section 69E, 69F or 69G include circumstances by reason of which
having regard to section 6A--
(a) a person has an interest in voting shares;
(b) a change has occurred in an interest in voting shares; or
(c) a person has ceased to be a substantial shareholder in a
company,
respectively.
Copy of notice to be served on Stock Exchange
69I. A person who gives a notice under section 69E, 69F or 69G
to a company referred to in paragraph 69B(2)(a), shall, on the day
on which he gives that notice, serve a copy of the notice on the
Stock Exchange as defined in the Securities Industry Act 1983 and
the Securities Commission as defined in the Securities Commission
Act 1993.
Laws of Malaysia
138
ACT 125
Notice to non-residents
69J. (1) A person who holds voting shares in a company, being
voting shares in which a non-resident has an interest, shall--
(a) give to the non-resident a notice in the prescribed form
as to the requirements of this Division; or
(b) where the first-mentioned person knows or has reasonable
grounds for believing that an interest of the non-resident
in the shares is an interest that the non-resident holds for
another person, give to the non-resident a notice in the
prescribed form as to the requirements of this Division
and direct the non-resident to give the notice or a copy
of the notice to that other person.
(2) The notice shall be given--
(a) if the first-mentioned person holds the shares on the date
on which this Division came into operation--within
fourteen days after that date; or
(b) if the first-mentioned person did not hold the shares on
that date--within fourteen days after becoming the holder
of the shares.
(3) In this section, "non-resident" means a person who is not
resident in Malaysia or a body corporate that is not incorporated
in Malaysia.
(4) Nothing in this section affects the operation of section 69C.
Registrar may extend time for giving notice under this Division
69K. (1) The Registrar may, on the application of a person who
is required to give a notice under this Division, in his discretion,
extend or further extend the time for giving the notice.
(2) Application for an extension under subsection (1) may be
made, and the power of the Registrar under the subsection may be
exercised, notwithstanding that the period referred to in that subsection
has expired.
Companies
139
Company to keep register of substantial shareholders
69L. (1) A company shall keep a register in which it shall forthwith
enter--
(a) in alphabetical order the names of persons from whom
it has received a notice under section 69E; and
(b) against each name so entered the information given in
the notice and, where it receives a notice under section
69F or 69G, the information given in that notice.
(2) The register shall be kept at the registered office of the
company, and shall be open for inspection by any member of the
company without charge and by any other person on payment for
each inspection of a sum of five ringgit or such lesser sum as the
company requires.
(3) The Registrar may at any time in writing require the company
to furnish him with a copy of the register or any part of the register
and the company shall furnish the copy within fourteen days after
the day on which the requirement is received by the company.
(4) If default is made in complying with this section, the company,
and every officer of the company who is in default is guilty of an
offence.
Penalty: Five thousand ringgit. Default penalty: Five hundred
ringgit.
(5) A company is not, by reason of anything done under this
Division--
(a) to be deemed for any purpose to have notice of; or
(b) to be put upon inquiry as to,
a right of a person to or in relation to a share in the company.
Offences against certain sections
69M.  A person who fails to comply with section 69E, 69F, 69G
or 69J shall be guilty of an offence.
Laws of Malaysia
140
ACT 125
Penalty: *One million ringgit. Default penalty: Fifty thousand
ringgit.
P o w e r s of Court with respect to defaulting substantial
shareholders
69N. (1) Where a person (in this section referred to as "the substantial
shareholder") is, or at any time after the date on which this Division
came into operation has been, a substantial shareholder in a company
and has failed to comply with section 69E, 69F or 69G, the Court
may, whether or not that failure still continues, on the application
of the Registrar, make one or more of the following orders--
(a) an order restraining the substantial shareholder from
disposing of any interest in shares in the company in
which he is or has been a substantial shareholder;
(b) an order restraining a person who is, or is entitled to be
registered as, the holder of shares referred to in paragraph
(a) from disposing of any interest in those shares;
(c) an order restraining the exercise of any voting or other
rights attached to any share in the company in which the
substantial shareholder has or has had an interest;
(d) an order directing the company not to make payment, or
to defer making payment, of any sum due from the company
in respect of any share in which the substantial shareholder
has or has had an interest;
(e) an order directing the sale of all or any of the shares in
the company in which the substantial shareholder has or
has had an interest;
(f) an order directing the company not to register the transfer
or transmission of specified shares;
(g) an order that any exercise of the voting or other rights
attached to specified shares in the company in which the
substantial shareholder has or has had an interest be
disregarded;
(h) for the purposes of securing compliance with any other
order made under this section, an order directing the
company or any other person to do or refrain from doing
a specified act.
*NOTE--Previously "five hundred ringgit"see Companies (Amendment) (No. 2) Act 1998
[Act A1043].
NOTE--Previously "five hundred ringgit"see Companies (Amendment) (No. 2) Act 1998
[Act A1043].
Companies
141
(2) Any order under this section may include such ancillary or
consequential provisions as the Court thinks just.
(3) An order under this section directing the sale of a share may
provide that the sale shall be made within such time and subject
to such conditions, if any, as the Court thinks fit, including, a
condition that the sale shall not be made to a person who is, or,
as a result of the sale, would become, a substantial shareholder in
the company.
(4) The Court may direct that where a share is not sold in
accordance with an order of the Court under this section, the share
shall vest in the Registrar.
(5) The Court shall, before making an order under this section
and in determining the terms of such an order, satisfy itself, so far
as it can reasonably do so, that the order would not unfairly
prejudice any person and the Court shall not make an order under
this section, other than an order restraining the exercise of voting
rights, if it is satisfied--
(a) that the failure of the substantial shareholder to comply
as mentioned in subsection (1) was due to his inadvertence
or mistake or to his not being aware of a relevant fact
or occurrence; and
(b) that, in all the circumstances, the failure ought to be
excused.
(6) The Court may, before making an order under this section,
direct that notice of the application be given to such persons as
it thinks fit or direct that notice of the application be published
in such manner as it thinks fit, or both.
(7) The Court may rescind, vary or discharge an order made by
it under this section or suspend the operation of such an order.
(8) Section 311 applies in relation to a share that vests in the
Registrar under this section as the first-mentioned section applies
in relation to an estate or interest in property referred to in the
first-mentioned section.
(9) A person who contravenes or fails to comply with an order
under this section which is applicable to him shall be guilty of an
offence against this Act.
Penalty: Three thousand ringgit. Default penalty: Five hundred
ringgit.
Laws of Malaysia
142
ACT 125
(10) Subsection (9) does not affect the powers of the Court in
relation to the punishment of contempt of the Court.
Power of company to require disclosure of beneficial interest
in its voting shares
69O. (1) Any company all or part of the shares in which are listed
for quotation on the official list of a Stock Exchange as defined
in the Securities Industry Act 1983 may by notice in writing
require any member of the company within such reasonable time
as is specified in the notice--
(a) to inform it whether he holds any voting shares in the
company as beneficial owner or as trustee; and
(b) if he holds them as trustee, to indicate so far as he can
the persons for whom he holds them by name and by
other particulars sufficient to enable those persons to be
identified and the nature of their interest.
(2) Where a company is informed in pursuance of a notice
given to any person under subsection (1) or under this subsection
that any other person has an interest in any of the voting shares
in a company, the company may by notice in writing require that
other person within such reasonable time as is specified in the
notice--
(a) to inform it whether he holds that interest as beneficial
owner or as trustee; and
(b) if he holds it as trustee, to indicate so far as he can the
persons for whom he holds it by name and by other
particulars sufficient to enable them to be identified and
the nature of their interest.
(3) Any company to which this section applies may by notice
in writing require any member of the company to inform it, within
such reasonable time as is specified in the notice, whether any of
the voting rights carried by any voting shares in the company held
by him are the subject of an agreement or arrangement under
which another person is entitled to control his exercise of those
rights and, if so, to give particulars of the agreement or arrangement
and the parties to it.
Companies
143
(4) Whenever a company receives information from a person
in pursuance of a requirement imposed on him under this section
with respect to shares held by a member of the company, it shall
be under an obligation to inscribe against the name of that member
in a separate part of the register kept by it under section 69L--
(a) the fact that the requirement was imposed and the date
on which it was imposed; and
(b) the information received in pursuance of the requirement.
(5) Section 69L shall apply in relation to the part of the register
referred to in subsection (4) as they apply in relation to the remainder
of the register and as if references to subsection 69L(1) included
references to subsection (4).
(6) Subject to subsection (7), any person who--
(a) fails to comply with a notice under this section; or
(b) in purported compliance with such a notice makes any
statement which he knows to be false in a material particular
or recklessly makes any statement which is false in a
material particular,
shall be guilty of an offence against this Act.
Penalty: Imprisonment for two years or *one million ringgit.
(7) A person shall not be guilty of an offence under paragraph
(6)(a) if he proves that the information in question was already in
the possession of the company or that the requirement to give it
was for any other reason frivolous or vexatious.
(8) A Stock Exchange or the Securities Commission may by
notice in writing direct a company to which this section applies
to invoke its powers under subsections (1) and (2) and to forthwith
provide it with the information so obtained.
(9) Where a company to which this section applies fails to
comply with the direction of a Stock Exchange or the Securities
Commission, the company and every officer of the company who
is in default shall be guilty of an offence against this Act.
Penalty: One million ringgit.
(Deleted by Act A1108)
69P.
*NOTE--Previously "five thousand ringgit"see Companies (Amendment) (No. 2) Act 1998
[Act A1043].
Laws of Malaysia
144
ACT 125
DIVISION 4
DEBENTURES
Register of debenture holders and copies of trust deed
7 0 . ( 1 ) E v e r y company which issues debentures (not being
debentures transferable by delivery) shall keep a register of holders
of the debentures at the registered office of the company or at
some other place in Malaysia.
(2) Every company shall within seven days after the register is
first kept at a place other than the registered office lodge with the
Registrar notice of the place where the register is kept and shall
within seven days after any change in the place at which the
register is kept lodge with the Registrar notice of the change.
(3) The register shall except when duly closed be open to the
inspection of the registered holder of any debentures and of any
holder of shares in the company and shall contain particulars of
the names and addresses of the debenture holders and the amount
of debentures held by them.
(4) For the purposes of this section a register shall be deemed
to be duly closed if closed in accordance with provisions contained
in the articles or in the debentures or debenture stock certificates,
or in the trust deed or other document relating to or securing the
debentures, during such periods (not exceeding in the aggregate
thirty days in any calendar year) as is therein specified.
(5) Every registered holder of debentures and every holder of
shares in a company shall at his request be supplied by the company
with a copy of the register of the holders of debentures of the
company or any part thereof on payment of one dollar for every
hundred words or part thereof required to be copied but the copy
need not include any particulars as to any debenture holder other
than his name and address and the debentures held by him.
(6) A copy of any trust deed relating to or securing any issue
of debentures shall be forwarded by the company to a holder of
those debentures at his request on payment of the sum of three
ringgit or such less sum as is fixed by the company, or where the
copy has to be specially made to meet the request on payment of
one ringgit for every hundred words or part thereof required to be
copied.
Companies
145
(7) If inspection is refused, or a copy is refused or not forwarded
within a reasonable time (but not more than one month) after a
request has been made pursuant to this section, the company and
every officer of the company who is in default shall be guilty of
an offence against this Act.
(8) A company which issues debentures may cause to be kept
in any place outside Malaysia a branch register of debenture holders
which shall be deemed to be part of the company's register of
debenture holders and Division 4 of Part V shall with such adaptations
as are necessary apply to and in relation to the keeping of a branch
register of debenture holders.
Penalty: *One thousand ringgit. Default penalty.
Specific performance of contracts
71.  A contract with a company to take up and pay for any debentures
of the company may be enforced by an order for specific performance.
Perpetual debentures
72.  A condition contained in any debenture or in any deed for
securing any debentures whether the debenture or deed is issued
or made before or after the commencement of this Act shall not
be invalid by reason only that the debentures are thereby made
irredeemable or redeemable only on the happening of a contingency
however remote or on the expiration of a period however long, any
rule of law or equity to the contrary notwithstanding.
Reissue of redeemed debentures
73. (1) Where a company has redeemed any debentures whether
before or after the commencement of this Act--
(a) unless any provision to the contrary, whether express or
implied, is contained in the articles or in any contract
entered into by the company; or
(b) unless the company has, by passing a resolution to that
effect or by some other act, manifested its intention that
the debentures shall be cancelled,
*NOTE--Previously "two hundred and fifty ringgit"see Companies (Amendment) Act 1986
[Act A657].
Laws of Malaysia
146
ACT 125
the company shall have and shall be deemed always to have had
power to reissue the debentures, either by reissuing the same
debentures or by issuing other debentures in their place but the
reissue of a debenture or the issue of one debenture in place of
another under this subsection, whether the reissue or issue was
made before or after the commencement of this Act, shall not be
regarded as the issue of a new debenture for the purpose of any
provision limiting the amount or number of debentures that may
be issued by the company.
(2) After the reissue the person entitled to the debentures shall
have and shall be deemed always to have had the same priorities
as if the debentures had never been redeemed.
(3) Where a company has either before or after the commencement
of this Act deposited any of its debentures to secure advances on
current account or otherwise, the debentures shall not be deemed
to have been redeemed by reason only of the account of the company
having ceased to be in debit while the debentures remain so deposited.
Qualifications of trustee for debenture holders
74. (1) Subject to this section every corporation which offers
debentures to the public for subscription or purchase in Malaysia
after the commencement of this Act shall make provision in those
debentures or in a trust deed relating to those debentures for the
appointment of a trustee corporation as trustee for the holders of
the debentures.
(2) Where a borrowing corporation is required to appoint a
trustee for the holders of any debentures in accordance with subsection
(1) it shall not allot any of those debentures until the appointment
has been made and the trustee corporation has consented to act as
trustee.
(3) Without leave of the Court, a trustee corporation shall not
be appointed, hold office or act as trustee for the holders of debentures
of a borrowing corporation if that trustee corporation is--
(a) a shareholder who beneficially holds shares in the borrowing
corporation;
(b) beneficially entitled to moneys owed by the borrowing
corporation to it;
(c) a corporation that has entered into a guarantee in respect
of the principal debt secured by those debentures or in
respect of interest thereon; or
Companies
147
(d) a corporation that is by virtue of section 6 deemed to be
related to--
(i) any corporation of a kind referred to in paragraphs
(a) to (c); or
(ii) the borrowing corporation.
(4) Notwithstanding anything contained in subsection (3), that
subsection shall not prevent a trustee corporation from being
appointed, holding office or acting as trustee for the holders of
debentures of a borrowing corporation by reason only that--
(a) the borrowing corporation owes to the trustee corporation
or to a corporation that is deemed by virtue of section
6 to be related to the trustee corporation any moneys so
long as such moneys are--
(i) moneys that (not taking into account any moneys
referred to in subparagraphs (ii) and (iii)) do not,
at the time of the appointment or at any time
within a period of three months after the debentures
are first offered to the public, exceed one-tenth of
the amount of the debentures proposed to be offered
to the public within that period and do not, at any
time after the expiration of that period, exceed
one-tenth of the amount owed by the borrowing
corporation to the holders of the debentures;
(ii) moneys that are secured by, and only by, a first
mortgage over land of the borrowing corporation,
or by any debentures issued by the borrowing
corporation to the public or by any debentures not
issued to the public which are issued pursuant to
the same trust deed as that creating other debentures
issued at any time by the borrowing corporation
to the public or by any debentures to which the
trustee corporation, or a corporation that is by
virtue of section 6 deemed to be related to the
trustee corporation, is not beneficially entitled; or
(iii) moneys to which the trustee corporation, or a
corporation that is by virtue of section 6 deemed
to be related to the trustee corporation, is entitled
as trustee for holders of any debentures of the
borrowing corporation in accordance with the terms
of the debentures or of the relevant trust deed; or
(b) the trustee corporation, or a corporation that is deemed
by virtue of section 6 to be related to the trustee corporation,
Laws of Malaysia
148
ACT 125
is a shareholder of the borrowing corporation in respect
of shares that it beneficially holds, so long as the shares
in the borrowing corporation beneficially held by the
trustee corporation and by all other corporations that are
deemed by virtue of section 6 to be related to it, do not
carry the right to exercise more than one-twentieth of the
voting power at any general meeting of the borrowing
corporation.
(5) Nothing in subsection (3) shall--
(a) affect the operation of any debentures or trust deed issued
or executed before the commencement of this Act; or
(b) apply to or in relation to the trustee for the holders of
any such debentures,
unless pursuant to any such debentures or trust deed a further offer
of debentures is made to the public after the commencement of this
Act.
(6) If default is made in complying with this section, the
corporation and every officer of the corporation who is in default
shall be guilty of an offence against this Act.
Penalty: *Ten thousand ringgit. Default penalty.
Retirement of trustees
75. (1) Notwithstanding anything contained in any Act or in the
relevant debentures or trust deed a trustee for the holders of debentures
shall not cease to be the trustee until a corporation qualified pursuant
to section 74 for appointment as trustee for the holders of the
debentures has been appointed to be the trustee for the holders of
the debentures and has taken office as such.
(2) Where provision has been made in the debentures or in the
relevant trust deed for the appointment of a successor to a trustee
for the holders of the debentures upon retirement or otherwise, the
successor may subject to section 74, be appointed in accordance
with that provision.
(3) Where no provision has been made in the debentures or in
the relevant trust deed for the appointment of a successor to a
*NOTE--Previously "one thousand ringgit"see Companies (Amendment) Act 1986 [Act A657].
Companies
149
retiring trustee the borrowing corporation may appoint a successor
which is qualified for appointment pursuant to section 74.
(4) Notwithstanding anything in this Act or in any debentures
or trust deed a borrowing corporation may, with the consent of an
existing trustee for the holders of the debentures, appoint as successor
to the existing trustee any corporation which is qualified for
appointment pursuant to section 74 and which is deemed by virtue
of section 6 to be related to the existing trustee.
(5) Where the trustee for the holders of the debentures has
ceased to exist or to be qualified under section 74 or fails or
refuses to act or is disqualified under that section the Court may
on the application of the borrowing corporation or the trustee for
the holders of the debentures or the holder of any of the debentures
or the Minister appoint any corporation qualified pursuant to section
74 to be the trustee for the holders of the debentures in place of
the trustee which has ceased to exist or to be qualified or which
has failed or refused to act as trustee or is disqualified as aforesaid.
(6) Where a successor is appointed to be a trustee in place of
any trustee the successor shall within one month after the appointment
lodge with the Registrar notice in the prescribed form of the
appointment.
Penalty: *One thousand ringgit. Default penalty.
Contents of trust deed
76. (1) Where a corporation offers debentures to the public for
subscription in Malaysia the debentures or the relevant trust deed
shall contain a limitation on the amount that the borrowing corporation
may, pursuant to those debentures or that deed, borrow and shall
contain covenants by the borrowing corporation, or if the debentures
do not or the trust deed does not expressly contain those covenants
they or it shall be deemed to contain covenants by the borrowing
corporation, to the following effect--
(a) that the borrowing corporation will use its best endeavours
to carry on and conduct its business in a proper and
efficient manner;
(b) that, to the same extent as if the trustee for the holders
of the debentures or any approved company auditor
*NOTE--Previously "two hundred and fifty ringgit"see Companies (Amendment) Act 1986
[Act A657].
Laws of Malaysia
150
ACT 125
appointed by the trustee were a director of the corporation
the borrowing corporation will--
(i) make available for its or his inspection the whole
of the accounting or other records of the borrowing
corporation; and
(ii) give to it or him such information as it or he
requires with respect to all matters relating to the
accounting or other records of the borrowing
corporation; and
(c) that the borrowing corporation will, on the application of
persons holding not less than one-tenth in nominal value
of the issued debentures to which the covenant relates
delivered to its registered office, by giving notice--
(i) to each of the holders of those debentures (other
than debentures payable to bearer) at his address
as specified in the register of debentures; and
(ii) by an advertisement in a daily newspaper circulating
generally throughout Malaysia addressed to all
holders of those debentures,
summon a meeting of the holders of those debentures to
consider the accounts and balance sheet which were last
lodged with the trustee for the holders of the debentures
by the borrowing corporation and to give to the trustee
directions in relation to the exercise of the trustee's powers,
such meeting to be held at a time and place specified in
the notice and advertisement under the chairmanship of
a person nominated by the trustee or such other person
as is appointed in that behalf by the holders of those
debentures present at the meeting.
(2) Where after the date of the commencement of this Act any
debenture (other than a debenture lawfully issued pursuant to a
trust deed executed before that date) is issued and neither the
debenture nor the trust deed relating to the issue of the debenture
expressly contains the limitation on the amount that the borrowing
c o r p o r a t i o n may borrow and the covenants referred to in
subsection (1) the corporation that issued the debenture and every
officer of the corporation who is in default shall be guilty of an
offence against this Act.
Penalty: *Two thousand ringgit.
*NOTE--Previously "five hundred ringgit"see Companies (Amendment) Act 1986 [Act A657].