Companies
151
Power of Court in relation to certain irredeemable debentures
77. (1) Notwithstanding anything in any debenture or trust deed
the security for any debentures which are irredeemable or redeemable
only on the happening of a contingency shall, if the Court so
orders, be enforceable, forthwith or at such other time as the Court
directs if on the application of the trustee for the holders of the
debentures or (where there is no trustee) on the application of the
holder of any of the debentures the Court is satisfied that--
(a) at the time of the issue of the debentures the assets of
the corporation which constituted or were intended to
constitute the security therefor were sufficient or likely
to become sufficient to discharge the principal debt and
any interest thereon;
(b) the security, if realized under the circumstances existing
at the time of the application, would be likely to bring
not more than sixty per centum of the principal sum of
moneys outstanding (regard being had to all prior charges
and charges ranking pari passu, if any); and
(c) the assets covered by the security, on a fair valuation on
the basis of a going concern after allowing a reasonable
amount for depreciation are worth less than the principal
sum and the borrowing corporation is not making sufficient
profit to pay the interest due on the principal sum or
(where no definite rate of interest is payable) interest
thereon at such rate as the Court considers would be a
fair rate to expect from a similar investment.
(2) Subsection (1) shall not affect any power to vary rights or
accept any compromise or arrangement created by the terms of the
debentures or the relevant trust deed or under a compromise or
arrangement between the borrowing corporation and creditors.
Duties of trustees
78. (1) A trustee for the holders of debentures--
(a) shall exercise reasonable diligence to ascertain whether
or not the assets of the borrowing corporation and of
each of its guarantor corporations which are or may be
available whether by way of security or otherwise are
sufficient or are likely to be or become sufficient to
discharge the principal debt as and when it becomes due;
Laws of Malaysia
152
ACT 125
(b) shall satisfy itself that each prospectus relating to the
debentures does not contain any matter which is inconsistent
with the terms of the debentures or with the relevant trust
deed;
(c) shall ensure that the borrowing corporation complies with
Division 7 so far as it relates to the debentures and is
applicable;
(d) shall exercise reasonable diligence to ascertain whether
or not the borrowing corporation and each of its guarantor
corporations have committed any breach of the covenants,
terms and provisions of the debentures or the trust deed;
(e) except where it is satisfied that the breach will not materially
prejudice the security, if any, for the debentures or the
interests of the holders of the debentures, shall take all
steps and do all such things as it is empowered to do to
cause the borrowing corporation and any of its guarantor
corporations to remedy any breach of those covenants,
terms and provisions;
(f) where the borrowing corporation or any of its guarantor
corporations fails when so required by the trustee to
remedy any breach of the covenants, terms and provisions
of the debentures or the trust deed, may place the matter
before a meeting of holders of the debentures, submit
such proposals for the protection of their investment as
the trustee considers necessary or appropriate and obtain
the directions of the holders in relation thereto; and
(g) where the borrowing corporation submits to those holders
a compromise or arrangement, shall give to them a statement
explaining the effect of the compromise or arrangement
and, if it thinks fit, recommend to them an appropriate
course of action to be taken by them in relation thereto.
(2) Where, after due inquiry, the trustee for the holders of the
debentures at any time is of the opinion that the assets of the
borrowing corporation and of any of its guarantor corporations
which are or should be available whether by way of security or
otherwise, are insufficient, or likely to become insufficient, to
discharge the principal debt as and when it becomes due, the
trustee may apply to the Minister for an order under this subsection
and the Minister may, on such application, after giving the borrowing
corporation an opportunity of making representations in relation
to that application, by order in writing served on the corporation
Companies
153
at its registered office in Malaysia, impose such restrictions on the
activities of the corporation, including restrictions on advertising
for deposits or loans and on borrowing by the corporation as the
Minister thinks necessary for the protection of the interests of the
holders of the debentures or the Minister may, and if the borrowing
corporation so requires, shall, direct the trustee to apply to the
Court for an order under subsection (4) and the trustee shall apply
accordingly.
(3) Where--
(a) after due inquiry, the trustee at any time is of the opinion
that the assets of the borrowing corporation and of any
of its guarantor corporations which are or should be
available, whether by way of security or otherwise, are
insufficient or likely to become insufficient, to discharge
the principal debt as and when it becomes due; or
(b) the corporation has contravened or failed to comply with
an order made by the Minister under subsection (2),
the trustee may, and where the borrowing corporation has requested
the trustee to do so, the trustee shall apply to the Court for an order
under subsection (4).
(4) Where an application is made to the Court under subsection
(2) or (3), the Court may, after giving the borrowing corporation
an opportunity of being heard, by order, do all or any of the
following things, namely:
(a) direct the trustee to convene a meeting of the holders of
the debentures for the purpose of placing before them
such information relating to their interests and such
proposals for the protection of their interests as the trustee
considers necessary or appropriate, and of obtaining their
directions in relation thereto and give such directions in
relation to the conduct of the meeting as the Court thinks
fit;
(b) stay all or any actions or proceedings before any court
by or against the borrowing corporation;
(c) restrain the payment of any moneys by the borrowing
corporation to the holders of debentures of the corporation
or to any class of such holders;
(d) appoint a receiver of such of the property as constitutes
the security, if any, for the debentures; and
Laws of Malaysia
154
ACT 125
(e) give such further directions from time to time as may be
necessary to protect the interests of the holders of the
debentures, the members of the borrowing corporation or
any of its guarantor corporations or the public,
but in making any such order the Court shall have regard to the
rights of all creditors of the borrowing corporation.
(5) The Court may vary or rescind any order made under subsection
(4) as the Court thinks fit.
(6) A trustee in making any application to the Minister or to the
Court shall have regard to the nature and kind of the security given
when the debentures were offered to the public, and if no security
was given shall have regard to the position of the holders of the
debentures as unsecured creditors of the borrowing corporation.
(7) A trustee may rely upon any certificate or report given or
statement made by any advocate, auditor or officer of the borrowing
corporation or guarantor corporation if it has reasonable grounds
for believing that such advocate, auditor or officer was competent
to give or make the certificate, report or statement.
Powers of trustee to apply to the Court for directions, etc.
79. (1) The trustee for the holder of debentures may apply to the
Court--
(a) for directions in relation to any matter arising in connection
with the performance of the functions of the trustee; or
(b) to determine any question in relation to the interests of
the holders of debentures,
and the Court may--
(c) give such directions to the trustee as the Court deems fit;
and
(d) if satisfied that the determination of the question will be
just and beneficial accede wholly or partially to any such
application on such terms and conditions as the Court
thinks fit or make such other order on the application as
the Court thinks just.
Companies
155
(2) The Court may on an application under this section order
a meeting of all or any of the holders of debentures to be called
to consider any matters in which they are concerned and to advise
the trustee thereon and may give such ancillary or consequential
directions as the Court thinks fit.
(3) The meeting shall be held and conducted in such manner as
the Court directs, under the chairmanship of a person nominated
by the trustee or such other person as the meeting appoints.
Obligations of borrowing corporation
80. (1) Where there is a trustee for the holders of any debentures
of a borrowing corporation the directors of the borrowing corporation
shall--
(a) at the end of a period not exceeding three months ending
on a day (not later than six months after commencement
of this Act or after the date of the relevant prospectus,
whichever is the later) which the trustee is required to
notify to the borrowing corporation in writing; and
(b) at the end of each succeeding period thereafter, being a
period of three months or such shorter time as the trustee
may, in any special circumstances, allow,
prepare a report that relates to that period and complies with the
requirements of subsection (2) and within one month after the end
of each such period lodge a copy of the report relating to that
period with the Registrar and with the trustee.
Penalty: *Ten thousand ringgit.
Default penalty: Two hundred and fifty ringgit.
(2) The report referred to in subsection (1) shall be signed by
not less than two of the directors on behalf of all of them and shall
set out in detail any matters adversely affecting the security or the
interests of the holders of the debentures and, without affecting the
generality of the foregoing, shall state.
(a) whether or not the limitations on the amount that the
corporation may borrow have been exceeded;
*NOTE--Previously "one thousand ringgit"see Companies (Amendment) Act 1986 [Act A657].
Laws of Malaysia
156
ACT 125
(b) whether or not the borrowing corporation and each of its
guarantor corporations have observed and performed all
t h e covenants and provisions binding upon them
respectively by or pursuant to the debentures or any trust
deed;
(c) whether or not any event has happened which has caused
or could cause the debentures or any provision of the
relevant trust deed to become enforceable and if so,
particulars of that event;
(d) whether or not any circumstances affecting the borrowing
corporation, its subsidiaries or its guarantor corporations
or any of them have occurred which materially affect any
security or charge included in or created by the debentures
o r any trust deed and if so, particulars of those
circumstances;
(e) whether or not there has been any substantial change in
the nature of the business of the borrowing corporation
or any of its subsidiaries or any of its guarantor corporations
since the debentures were first issued to the public which
has not previously been reported upon as required by this
section and if so, particulars of that change; and
(f) where the borrowing corporation has deposited money
with or lent money to or assumed any liability of a
corporation which pursuant to section 6 is deemed to be
related to the borrowing corporation, particulars of--
(i) the total amounts so deposited or loaned and the
extent of any liability so assumed during the period
covered by the report; and
(ii) t h e total amounts owing to the borrowing
corporation in respect of money so deposited or
loaned and the extent of any liability so assumed
as at the end of the period covered by the report,
distinguishing between deposits, loans and assumptions
of liabilities which are secured and those which are
unsecured, but not including any deposit with or loan to
or any liability assumed on behalf of a corporation if that
corporation has guaranteed the repayment of the debentures
of the borrowing corporation and has secured the guarantee
by a charge over its assets in favour of the trustee for the
holders of the debentures of the borrowing corporation.
Companies
157
(3) Where there is a trustee for the holders of any debentures
issued by a borrowing corporation, the borrowing corporation and
each of its guarantor corporations which has guaranteed the repayment
of the moneys raised by the issue of those debentures shall (within
twenty-one days after the creation of the charge) in writing furnish
the trustee for the holders of the debentures, whether or not any
demand therefor has been made, with particulars of any charge
created by the corporation or the guarantor corporation, as the case
requires, and when the amount to be advanced on the security of
the charge is indeterminate (within seven days after the advance)
with particulars of the amount in fact advanced but where any such
advances are merged in a current account with bankers or trade
creditors it shall be sufficient for particulars of the net amount
outstanding in respect of any such advances to be furnished every
three months.
(4) The directors of every borrowing corporation and of every
guarantor corporation shall at some date not later than nine months
after the expiration of each financial year of the corporation cause
to be made out and lodged with the Registrar and with the trustee
for the holders of the debentures, if any, a profit and loss account
for the period from the end of that financial year until the expiration
of six months after the end of that financial year and a balance
sheet as at the end of the period to which the profit and loss
account relates.
Penalty: *One thousand ringgit. Default penalty.
(5) Subsection 169(4) to (13) and subsection 174(1), (2) and (4)
shall with such adaptations as are necessary be applicable to every
profit and loss account and balance sheet made out and lodged
pursuant to subsection (4) as if that profit and loss account and
balance sheet were a profit and loss account and balance sheet
referred to in those subsections.
(6) Where the directors of a borrowing corporation do not lodge
with the trustee for the holders of debentures a report as required
by subsection (1) or where the directors of a borrowing corporation
or the directors of a guarantor corporation do not lodge with the
trustee the balance sheet, profit and loss accounts and reports as
required by subsection (4) within the time prescribed the trustee
shall forthwith lodge notice of that fact with the Registrar.
*NOTE--Previously "two hundred and fifty ringgit"see Companies (Amendment) Act 1986 [Act A657].
Laws of Malaysia
158
ACT 125
Obligation of guarantor corporation to furnish information
81. (1) For the purpose of the preparation of a report that, by this
Act, is required to be signed by or on behalf of the directors of
a borrowing corporation or any of them, that corporation may, by
notice in writing require any of its guarantor corporations to furnish
it with any information relating to that guarantor corporation which
is, by this Act, required to be contained in that report, and that
guarantor corporation shall furnish the borrowing corporation with
that information before such date, being a date not earlier than
fourteen days after the notice is given, as may be specified in that
behalf in the notice.
(2) A corporation which fails to comply with a requirement
contained in a notice given pursuant to subsection (1) and every
officer of that corporation who is in default shall be guilty of an
offence against this Act.
Penalty: *Ten thousand ringgit. Default penalty.
Loans and deposits to be immediately repayable on certain
events
82. (1) Where in any prospectus issued in connection with an
invitation to the public to subscribe for or to purchase debentures
of a corporation, there is a statement as to any particular purpose
or project for which the moneys received by the corporation in
response to the invitation are to be applied, the corporation shall
from time to time make reports to the trustee for the holders of
those debentures as to the progress that has been made towards
achieving that purpose or completing that project.
(2) Each such report shall be included in the report required to
be furnished to the trustee for the holders of the debentures under
subsection 80(1).
(3) When it appears to the trustee for the holders of the debentures
that the purpose or project has not been achieved or completed
within the time stated in the prospectus within which the purpose
or project is to be achieved or completed or, where no such time
was stated, within a reasonable time, the trustee may and, if in his
opinion it is necessary for the protection of the interests of the
holders of the debentures, shall give notice in writing to the
corporation requiring it to repay the moneys so received by the
corporation and within one month after the notice is given, lodge
with the Registrar a copy thereof.
*NOTE--Previously "two hundred and fifty ringgit"see Companies (Amendment) Act 1986 [Act A657].
Companies
159
(4) The trustee shall not give a notice pursuant to subsection (3)
if it is satisfied--
(a) that the purpose or project has been substantially achieved
or completed;
(b) that the interests of the holders of debentures have not
been materially prejudiced by the failure to achieve or
complete the purpose or project within the time stated in
the prospectus or within a reasonable time; or
(c) that the failure to achieve the purpose or project was due
to circumstances beyond the control of the corporation
that could not reasonably have been foreseen by the
corporation at the time that the prospectus was issued.
(5) Upon receipt by the corporation of a notice referred to in
subsection (3), the corporation shall be liable to repay, and on
demand in writing by him shall immediately repay, to any person
entitled thereto, any money owing to him as the result of a loan
or deposit made in response to the invitation unless--
(a) before the moneys were accepted by the corporation the
corporation had given notice in writing to the persons
from whom the moneys were received specifying the
purpose or project for which the moneys would in fact
be used and the moneys were accepted by the corporation
accordingly; or
(b) the corporation by notice in writing served on the holders
of the debentures--
(i) had specified the purpose or project for which the
moneys would in fact be applied by the corporation;
and
(ii) had offered to repay the moneys to the holders of
the debentures, and that person had not within
fourteen days after the receipt of the notice, or
such longer time as was specified in the notice,
in writing demanded from the corporation repayment
of the money.
(6) Where the corporation has given a notice in writing as
provided in subsection (5), specifying the purpose or project for
which the moneys will in fact be applied by the corporation, this
section shall apply and have effect as if the purpose or project so
specified in the notice was the particular purpose or project specified
in the prospectus as the purpose or project for which the moneys
were to be applied.
Laws of Malaysia
160
ACT 125
Liability of trustees for debenture holders
83. (1) Subject to this section, any provision contained in a trust
deed relating to or securing an issue of debentures, or in any
contract with the holders of debentures secured by a trust deed,
shall be void so far as it would have the effect of exempting a
trustee thereof from or indemnifying it against liability for breach
of trust where it fails to show the degree of care and diligence
required of it as trustee.
(2) Subsection (1) shall not invalidate--
(a) any release otherwise validly given in respect of anything
done or omitted to be done by a trustee before the giving
of the release; or
(b) any provision enabling such a release to be given--
(i) on the agreement thereto of a majority of not less
than three-fourths in nominal value of the debenture
holders present and voting in person or, where
proxies are permitted, by proxy at a meeting
summoned for the purpose; and
(ii) either with respect to specific acts or omissions or
on the dissolution of the trustee or on its ceasing
to act.
(3) Subsection (1) shall not operate--
(a) to invalidate any provision in force at the commencement
of this Act so long as any trustee then entitled to the
benefit of that provision remains a trustee of the deed in
question; or
(b) to deprive any trustee of any exemption or right to be
indemnified in respect of anything done or omitted to be
done by the trustee while any such provision was in
force.
DIVISION 5
INTERESTS OTHER THAN SHARES, DEBENTURES, ETC.
Interpretation
84. (1) In this Division and in the Seventh Schedule, unless
inconsistent with the context or subject matter--
Companies
161
"company" means a public company, and includes a corporation
that is a public company under the law of a proclaimed country
and is registered as a foreign company in Malaysia;
"financial year", in relation to a deed, means the period of
twelve months ending on the thirty-first day of December or on
such other date as is specified in lieu thereof in the deed;
"interest" means any right to participate or interest, whether
enforceable or not and whether actual, prospective or contingent--
(a) in any profits, assets or realization of any financial or
business undertaking or scheme, whether in Malaysia or
elsewhere;
(b) in any common enterprise whether in Malaysia or elsewhere,
in which the holder of the right or interest is led to expect
profits, rent or interest from the efforts of the promoter
of the enterprise or a third party;
(c) in any time-sharing scheme; or
(d) in any investment contract,
whether or not the right or interest is evidenced by a formal
document and whether or not the right or interest relates to a
physical asset, but does not include--
(e) any share in or debenture of a corporation;
(f) any interest in or arising out of a policy of life insurance;
(g) any interest in a partnership agreement unless the
agreement--
(i) relates to an undertaking, scheme, enterprise or
investment contract promoted by or on behalf of
a person whose ordinary business is or includes
the promotion of similar undertakings, schemes,
enterprises or investment contracts, whether or
not that person is a party to the agreement; or
(ii) is an agreement, or is within a class of agreements,
prescribed by regulations for the purposes of this
paragraph; or
(h) any participatory interest in a unit trust scheme as defined
in section 2 of the Securities Industry Act 1983;
Laws of Malaysia
162
ACT 125
"investment contract" means any contract, scheme or arrangement
which in substance and irrespective of the form thereof involves
the investment of money in or under such circumstances that the
investor acquires or may acquire an interest in or right in respect
of property which under or in accordance with the terms of investment
will, or may at the option of the investor, be used or employed in
common with any other interest in or right in respect of property
acquired in or under like circumstances and includes any contract,
scheme or arrangement which in substance and irrespective of the
form thereof entitles the investor to a right to use or enjoy any
s p o r t , recreational, holiday or other related facilities for a
consideration and for a duration of not less than twelve months
whether or not on a recurring basis;
"management company", in relation to any interests issued or
proposed to be issued or any deed that relates to any interests
issued or proposed to be issued means a company by or on behalf
of which the interests have been or are proposed to be issued and
includes any person for the time being exercising the functions of
the management company;
"proclaimed country" means a country which the Minister has,
by notice published in the Gazette, declared to be a proclaimed
country for the purposes of the Division;
" t i m e - s h a r i n g scheme" means a scheme, undertaking or
enterprise--
(a) participants in which are, or may become, entitled to use,
occupy or possess, for two or more periods during the
period for which the scheme, undertaking or enterprise,
whether in Malaysia or elsewhere is to operate, property
to which the scheme, undertaking or enterprise relates;
and
(b) that is to operate for a period of not less than three years.
(2) A reference in this Division to a deed shall be read as
including a reference to any instrument amending or affecting the
deed.
Companies
163
Approved deeds
85.  For the purposes of this Division, a deed shall be an approved
deed if--
(a) the Registrar has granted his approval to the deed under
this Division; and
(b) the Minister has granted his approval under this Division
to the trustee or representative appointed for the purposes
of the deed acting as trustee or representative and that
a p p r o v a l has not been revoked and the trustee or
representative has not ceased to hold office.
Approval of deeds
86. (1) Where a deed makes provision for the appointment of a
company as trustee for or representative of the holders of interests
issued or proposed to be issued by a company the Registrar may,
subject to this section, grant his approval to the deed.
(2) The Registrar shall not grant his approval to a deed unless
the deed--
(a) complies with the requirements of this Division; and
(b) makes provision for such other matters and things as are
required by or under the regulations to be included in the
deed and if regulations have been made prescribing the
charges that may be made by a management company,
unless the deed provides--
(i) that the charges to be made by the management
company do not exceed such percentages or amounts
as are prescribed; and
(ii) that the price at which the interests to which the
deed relates are to be sold or purchased by the
management company are consistent with the
regulations relating to those prices.
(3) Within seven days after a deed has been approved under
this section, the management company shall lodge in the office of
the Registrar the deed, or a copy of the deed verified by statutory
declaration, and the copy shall for all purposes, in the absence of
proof that it is not a true copy, be regarded as an original.
Laws of Malaysia
164
ACT 125
Approval of trustees
87. (1) The Minister on the recommendation of Bank Negara
Malaysia may, subject to such terms and conditions as he thinks
fit, grant his approval to a company acting as trustee or representative
for the purposes of a deed.
( 2 ) N o t w i t h s t a n d i n g subsection (1) the Minister on the
recommendation of Bank Negara Malaysia may, having regard to
the nature of the undertaking, scheme or enterprise, contract or
arrangement to which a deed relates, grant his approval subject to
such terms and conditions as he thinks fit to such other person
acting as trustee or representative for the purpose of the deed.
(3) The Minister may, at any time, by reason of a breach of a
term or condition subject to which the approval was granted or for
any other reason, revoke an approval granted by him under this
section.
Covenants to be included in deeds
88. (1) A deed shall, for the purposes of paragraph 86(2)(a),
contain covenants to the following effect, namely:
(a) a covenant binding the management company that it will
use its best endeavours to carry on and conduct its business
in a proper and efficient manner and to ensure that any
undertaking, scheme or enterprise to which the deed relates
is carried on and conducted in a proper and efficient
manner;
(b) covenants binding the management company--
(i) that the management company will pay to the
trustee or representative, within thirty days after
their receipt by the company, any moneys that,
under the deed, are payable by the company to the
trustee or representative;
(ii) that the management company will not sell any
interest to which the deed relates otherwise than
at a price calculated in accordance with the deed;
Companies
165
(iii) that the management company will, at the request
of the holder of an interest, purchase that interest
from the holder and that the purchase price will
be a price calculated in accordance with the deed;
and
(iv) that the management company will not, without
the approval of the trustee or representative, publish
or cause to be published any advertisement, circular
or other document containing any statement with
respect to the sale price of interests to which the
deed relates or the yield therefrom or containing
any invitation to buy interests;
(c) covenants binding the trustee or representative that it
will--
(i) exercise all due diligence and vigilance in carrying
out its functions and duties and in watching the
rights and interests of the holders of the interests
to which the deed relates;
(ii) keep or cause to be kept proper books of account
in relation to those interests;
(iii) cause those accounts to be audited at the end of
each financial year by an approved company auditor;
and
(iv) send or cause to be sent by post a statement of the
accounts with the report of the auditor thereon
within two months of the end of the financial
year, to each of the holders of those interests;
(d) a covenant binding the management company and the
trustee or representative, respectively, that no moneys
available for investment under the deed will be invested
in or lent to the management company, or to the trustee
or representative, or to any company (other than a prescribed
corporation within the meaning of subsection 38(6)) which
is by virtue of section 6 deemed to be related to the
management company or to the trustee or representative;
(e) a covenant binding the management company that, to the
same extent as if the trustee or representative were a
director of the company, the company will--
Laws of Malaysia
166
ACT 125
(i) make available to the trustee or representative, or
to any approved company auditor appointed by it,
for inspection the whole of the books of the company
whether kept at the registered office or elsewhere;
and
(ii) give to the trustee or representative or to any such
auditor such oral or written information as it or
he requires with respect to all matters relating to
t h e undertaking, scheme or enterprise of the
company or any property (whether acquired before
or after the date of the deed) of the company or
otherwise relating to the affairs thereof;
(f) a covenant binding the management company that the
management company will make available, or ensure that
there is made available, to the trustee or representative
such details as the trustee or representative requires with
respect to all matters relating to the undertaking, scheme
or enterprise to which the deed relates;
(g) as from a day to be fixed by the Minister by notice
published in the Gazette, covenants binding the management
company and the trustee or representative respectively,
t h a t the management company or the trustee or
representative, as the case may be, will not exercise the
right to vote in respect of any shares relating to the
interests to which the deed relates held by the management
company, trustee or representative at any election for
directors of a corporation whose shares are so held, without
the consent of the majority of the holders of the interests
to which the deed relates present in person and voting
given at a meeting of those holders summoned in the
manner provided for in paragraph (h)(i) and (ii) for the
purpose of authorizing the exercise of the right at the
next election; and
(h) a covenant binding the management company that the
management company will within twenty-one days after
an application is delivered to the company at its registered
office, being an application by not less than fifty or one-
tenth in number, whichever is the less, of the holders of
the interests to which the deeds relates--
(i) by sending notice by post of the proposed meeting
at least seven days before the proposed meeting
Companies
167
to each of those holders at his last known address
or in the case of joint holders to the joint holder
whose name stands first in the company's records;
and
(ii) by publishing at least fourteen days before the
proposed meeting an advertisement giving notice
of the meeting in a newspaper circulating generally
throughout Malaysia,
summon a meeting of the holders for the purpose of
laying before the meeting the accounts and balance sheet
which were laid before the last preceding annual general
meeting of the management company or the last audited
statement of accounts of the trustee or representative,
and for the purpose of giving to the trustee or representative
such directions as the meeting thinks proper.
(2) A meeting summoned for the purposes of a covenant contained
in a deed in pursuance of paragraph (1)(g) or (h) shall be held at
the time and place specified in the notice and advertisement, being
a time not later than two months after the giving of the notice,
under the chairmanship of--
(a) such person as is appointed in that behalf by the holders
of the interests to which the deed relates present at the
meeting; or
(b) where no such appointment is made, a nominee of the
trustee or representative approved by the Registrar,
and shall be conducted in accordance with the deed or, so far as
the deed makes no provision, as directed by the chairman of the
meeting.
(3) Notwithstanding anything to the contrary contained in an
approved deed, the undertaking, scheme, enterprise, contract or
arrangement to which the deed relates may be continued in operation
or existence if it appears to be in the interests of the holders of
the interests to which the deed relates during such period as is or
such periods as are agreed upon by the trustee or representative
and the management company.
Laws of Malaysia
168
ACT 125
(4) Where a direction is given to the trustee or representative
at a meeting summoned pursuant to a covenant complying with
paragraph (1)(h), the trustee or representative--
(a) shall comply with the direction unless it is inconsistent
with the deed or this Act; and
(b) shall not be liable for anything done or omitted to be
done by it by reason only of its following that direction.
(5) Where the trustee or representative is of the opinion that
any direction so given is inconsistent with the deed or this Act or
is otherwise objectionable, the trustee or representative may apply
to the Court for an order confirming, setting aside or varying the
direction and the Court may make such order as it thinks fit.
Interests to be issued by companies only
89.  No person except a company or an agent of a company
authorized in that behalf under the seal of the company shall issue
or offer to the public for subscription or purchase or shall invite
the public to subscribe for or purchase any interest.
Statement to be issued
90. (1) Before a company or an agent of a company issues or
offers to the public for subscription or purchase or invites the
public to subscribe for or purchase any interest, the company shall
issue or cause to be issued a statement in writing in connection
therewith, which statement shall for all purposes be deemed to be
a prospectus issued by a company, and subject to subsection (2)
all provisions of this Act relating to prospectuses or to the offering
or to an intended offering of shares for subscription or purchase
to the public shall, with such adaptations as are necessary, apply
and have effect accordingly as if the interest were shares offered
or intended to be offered to the public for subscription or purchase
and as if persons accepting any offer or invitation in respect of or
subscribing for or purchasing any such interest were subscribers
for shares.
(2) Subject to subsection (3) the statement shall set out--
(a) the matters and reports specified in the Seventh Schedule;
and
(b) such other matters as are required by or under the regulations
to be set out in the statement,
Companies
169
with such adaptations as the circumstances of each case require
and the Registrar approves.
(3) A matter or report referred to in subsection (2) may be
omitted from a statement if having regard to the nature of the
interest the Registrar is of the opinion that the matter or report is
not appropriate for inclusion in the statement and has by writing
under his hand approved the omission.
No issue without approved deed
91. (1) A person shall not issue or offer to the public for subscription
or purchase or invite the public to subscribe for or purchase any
interest unless, at the time of the issue, offer or invitation, there
is in force, in relation to the interest, a deed that is an approved
deed.
(2) A person shall not in any deed, prospectus, statement,
advertisement or other document relating to any interest make any
reference to an approval of a deed or of a trustee or representative
granted under this Division.
(3) Where--
(a) an interest issued by a corporation before the date of
commencement of this Act is in existence immediately
before that date;
(b) this Division would have applied in relation to the issue
of the interest if the interest had been issued on or after
that date;
(c) there is not, at the expiration of three months after that
date, a deed that is an approved deed in force in relation
to the interest; and
(d) the corporation did not, within a period of one month
after that date, apply for approval under this Division of
a deed in relation to the interest or, if it did so apply,
approval was refused,
the corporation shall, within fourteen days after the expiration of
the period referred to in paragraph (c), give to the holder of the
interest and to the Registrar notice in writing that there is not in
force in relation to that interest a deed that is an approved deed
and, if this subsection is not complied with, each director of the
corporation shall, in addition to the corporation, be deemed to
have failed to comply with this subsection.
Laws of Malaysia
170
ACT 125
(4) The Minister may modify the application to a corporation
of subsection (3) by extending any period referred to in that subsection
or may exempt any corporation from compliance with that subsection.
(5) Nothing in subsection (3) shall be construed as authorizing
the Registrar to grant his approval to a deed that relates to an
interest issued by a corporation that is not a company for the
purposes of this Division.
Register of interest holders
92. (1) The management company shall, in respect of each deed
with which the company is concerned, keep a register of the holders
of interests under the deed and enter therein--
(a) the names and addresses of the holders;
(b) the extent of the holding of each holder and, if his interest
consists of a specific interest in any property, a description
of the property and its location sufficient to identify it;
(c) the date at which the name of each person was entered
in the register as a holder; and
(d) the date at which any person ceased to be a holder.
(2) Division 4 of Part V shall so far as is applicable and with
such adaptations as are necessary apply to and in relation to the
register.
(3) A management company which--
(a) keeps a register of holders of interests at a place within
three miles of the office of the Registrar or, where the
registered office of a management company is within a
regional area, within three miles of the office of the
Regional Registrar; and
(b) provides reasonable accommodation and facilities for
persons to inspect and take copies of its list of interest
holders,
need not comply with the provision of paragraph 93(1)(a) in relation
to the deed under which the interests are held unless the Minister
by notice published in the Gazette otherwise directs.
Companies
171
Returns, information, etc., relating to interests
93. (1) Where a deed is or has at any time been an approved deed,
the management company shall, so long as the deed or any deed
in substitution in whole or in part for the deed, remains in force,
lodge with the Registrar, within two months after the end of each
financial year applicable to the deed--
(a) a return containing a list of all persons who, at the end
of the financial year, were holders of the interests to
which the deed relates, showing the name and address of
each holder and the extent of his holding and, if his
interest consists of a specific interest in any property, a
description of the property and its location sufficient to
identify it;
(b) a summary of--
(i) all purchases and sales of land and marketable
securities affecting the interests of the holders
during the financial year; and
(ii) all other investments affecting the interests of the
holders made during the financial year, showing
the descriptions and quantities of those investments;
(c) a statement of the total amount of brokerage affecting the
interests of the holders paid or charged by the management
company during the financial year and the proportion
thereof paid to any stock or share broker, or any partner
employee or nominee of any stock or share broker, who
is an officer of the company and the proportion retained
by the company;
(d) a list of all parcels of land and marketable securities, and
other investments, held by the trustee or representative
in relation to the deed, as at the end of the financial year,
s h o w i n g the value of the land, securities or other
investments and the basis of the valuations; and
(e) such other statements and particulars, if any, as may be
prescribed.
(2) Any document required to be lodged with the Registrar by
the management company under subsection (1) shall be signed by
at least one director of the management company.
Laws of Malaysia
172
ACT 125
(3) A company to which subsection (1) applies shall, if so
requested by any holder of an interest to which the deed relates
within a period of one month after the end of the financial year,
send by post or cause to be sent by post to the holder, within two
months after the end of the financial year, a copy of the documents
which the company is required to lodge with the Registrar by
virtue of subsection (1)(b) to (e).
Penalty for contravention of Division, etc.
94. (1) A person shall not--
(a) contravene or fail to comply with this Division; or
(b) fail to comply with a covenant contained or deemed to
be contained in any deed that is or at any time has been
an approved deed.
Penalty: *Imprisonment for five years or one hundred thousand
ringgit or both.
(2) A person shall not be relieved from any liability to any
holder of an interest by reason of any contravention of, or failure
to comply with this Division.
Winding up of schemes, etc.
95. (1) Where the management company under a deed is in
liquidation or where, in the opinion of the trustee or representative,
the management company has ceased to carry on business or has,
to the prejudice of holders of interests to which the deed relates,
failed to comply with the deed, the trustee or representative shall
summon a meeting of the holders.
(2) A meeting under subsection (1) shall be summoned--
(a) by sending by post notice of the proposed meeting at
least twenty-one days before the proposed meeting, to
each holder at his last known address, or, in the case of
joint holders, to the joint holder whose name stands first
in the company's records; and
(b) by publishing, at least twenty-one days before the proposed
meeting, an advertisement giving notice of the meeting
in a newspaper circulating generally throughout Malaysia.
*NOTE--Previously "Imprisonment for twelve months or two thousand five hundred ringgit"see
Companies (Amendment) Act 1986 [Act A657].
-- Previously "Imprisonment for three years or ten thousand ringgit"see Companies (Amendment)
(No. 2) Act 1992 [Act A836].
Companies
173
(3) Subsection 88(2) shall apply to such a meeting as if the
meeting were a meeting referred to in that section.
(4) If at any such meeting a resolution is passed by a majority
in number representing three-fourths in value of the holders of the
interests present and voting either in person or by proxy at the
meeting that the undertaking, scheme, enterprise, contract or
arrangement to which the deed relates be wound up, the trustee
or representative shall apply to the Court for an order confirming
the resolution.
(5) On an application by the trustee or representative the Court
may, if it is satisfied that it is in the interest of the holders of the
interests, confirm the resolution and may make such orders at it
thinks necessary or expedient for the effective winding up of the
undertaking, scheme, enterprise, contract or arrangement.
Power to exempt from compliance with Division and non-
application of Division in certain circumstances
96. (1) The Minister may, by notice published in the Gazette and
subject to such terms and conditions as are specified in the notice,--
(a) exempt any company or class of companies or person or
class of persons from complying with all or any of the
provisions of this Division in relation to any interest or
class of interests specified in the notice; or
(b) declare that all or any of the provisions of this Division
shall not apply to any interest or class of interests specified
in the notice, upon a request made by the Minister charged
with the responsibility for finance on the grounds--
(i) that the interest or class of interests is more
appropriately regulated as a securities or futures
contract, as the case may be; and
(ii) that any issue of, offer for subscription or purchase
of, or invitation to subscribe for or purchase, such
i n t e r e s t or class of interests would be more
a p p r o p r i a t e l y regulated under the Securities
Commission Act 1993, the Securities Industry Act
1983 or the Futures Industry Act 1993, as the case
may be,
and may, by notice published in the Gazette, revoke such notice
or vary it in such manner as he thinks fit.
Laws of Malaysia
174
ACT 125
(1A) Where a company or person contravenes or fails to comply
with any term or condition specified in a notice of exemption
granted under paragraph (1)(a), every officer of the company or
person 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.
(2) This Division shall not apply in the case of the sale of any
interest by a personal representative, liquidator, receiver or trustee
in bankruptcy in the normal course of realization of assets.
Liability of trustees
97. (1) Subject to this section, any provision contained in a deed
that is or at any time has been an approved deed, or in any contract
with the holders of interests to which such a deed relates, shall be
void so far as it would have the effect of exempting a trustee or
representative under the deed from, or indemnifying a trustee or
representative against, liability for breach of trust where the trustee
or representative fails to show the degree of care and diligence
required of a trustee or representative.
(2) Subsection (1) shall not invalidate--
(a) any release otherwise validly given in respect of anything
done or omitted to be done by a trustee or representative
before the giving of the release; or
(b) any provision enabling such a release to be given--
(i) on the agreement thereto of a majority of not less
than three-fourths of the holders of interests as
vote in person or by proxy at a meeting summoned
for the purpose; and
(ii) either with respect to specific acts or omissions or
on the trustee or representative ceasing to act.
DIVISION 6
TITLE AND TRANSFERS
Nature of shares
98. The shares or other interest of any member in a company shall
be movable property, transferable in the manner provided by the
articles, and shall not be of the nature of immovable property.
Companies
175
Numbering of shares
99. (1) Each share in a company shall be distinguished by an
appropriate number.
(2) Notwithstanding subsection (1)--
(a) if at any time all the issued shares in a company or all
the issued shares therein of a particular class are fully
paid up and rank equally for all purposes, none of those
shares need thereafter have a distinguishing number so
long as each of those shares remains fully paid up and
ranks equally for all purposes with all shares of the same
class for the time being issued and fully paid up; or
(b) if all the issued shares in a company are evidenced by
certificates in accordance with section 100 and each
certificate is distinguished by an appropriate number and
that number is recorded in the register of members, none
of those shares need have a distinguishing number.
Certificate to be evidence of title
100. (1) A certificate under the common or official seal of a
company specifying any shares held by any member of the company
shall be prima facie evidence of the title of the member to the
shares.
(2) Every share certificate shall be under the common seal of
the company or (in the case of a share certificate relating to shares
on a branch register) the common or official seal of the company
and shall state as at the date of the issue of the certificate--
(a) the name of the company and the authority under which
the company is constituted;
(b) the address of the registered office of the company in
Malaysia, or where the certificate is issued by a branch
office, the address of that branch office; and
(c) the nominal value and the class of the shares and the
extent to which the shares are paid up.
(3) Failure to comply with this section shall not affect the rights
of any holder of shares.
Laws of Malaysia
176
ACT 125
(4) 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.
Company may have duplicate common seal
101.  A company may if authorized by its articles have a duplicate
common seal which shall be a facsimile of the common seal of the
company with the addition on its face of the words "Share Seal"
and a certificate under the duplicate seal shall be deemed to be
sealed with the common seal of the company for the purposes of
this Act.
Loss or destruction of certificates
102. (1) Subject to subsection (2) where a certificate or other
document of title to shares or debentures is lost or destroyed, the
company shall on payment of a fee not exceeding two ringgit issue
a duplicate certificate or document in lieu thereof to the owner on
his application accompanied by--
(a) a statutory declaration that the certificate or document
has been lost or destroyed, and has not been pledged sold
or otherwise disposed of, and, if lost, that proper searches
have been made; and
(b) an undertaking in writing that if it is found or received
by the owner it will be returned to the company.
(2) Where the value of the shares or debentures represented by
the certificate or document is greater than five hundred ringgit, the
directors of the company may, before accepting an application for
the issue of a duplicate certificate or document, require the applicant--
(a) to cause an advertisement to be inserted in a newspaper
circulating in a place specified by the directors stating
that the certificate or document has been lost or destroyed
and that the owner intends after the expiration of fourteen
days after the publication of the advertisement to apply
to the company for a duplicate; or
(b) to furnish a bond for an amount equal to at least the
c u r r e n t market value of the shares or debentures
indemnifying the company against loss following on the
production of the original certificate or document,
or may require the applicant to do both of those things.
Companies
177
Instrument of transfer
103. (1) Notwithstanding anything in its articles, a company shall
not register a transfer of shares or debentures unless a proper
instrument of transfer in the prescribed form has been delivered
to the company, but this subsection shall not prejudice any power
to register as a shareholder or debenture holder any person to
whom the right to any shares in or debentures of the company has
been transmitted by operation of law.
(1A) Nothing in this section shall be construed as affecting the
validity of any instrument which would be effective to transfer shares or
debentures apart from this section; and any instrument purporting to be
made in any form which was common or usual in use, or in any other
form authorized or required for that purpose apart from this section
before the commencement of this Act, shall be sufficient, whether or not
it is completed in accordance with the prescribed form, if it complies
with the requirements as to execution and contents which apply to a
transfer:
Provided that a company shall be precluded from registering a
transfer of shares or debentures, the title of which is evidenced by a
certificate that is issued on or after the date of coming into operation of
this subsection unless a proper instrument of transfer in the prescribed
form has been delivered to the company.
Transfer by personal representatives
(2) A transfer of the share, debenture or other interest of a deceased
person made by his personal representative shall, although the personal
representative is not himself a member of the company, be as valid as
if he had been such a member at the time of the execution of the
instrument of transfer.
(3) The production to a company of any document which is by law
sufficient evidence of probate of the will, or letters of administration of
the estate, of a deceased person having been granted to some person shall
be accepted by the company, notwithstanding anything in its articles, as
sufficient evidence of the grant.
(4) In this section "instrument of transfer" includes a written
application for transmission of a share debenture or other interest to a
personal representative.
Laws of Malaysia
178
ACT 125
Registration of transfer at request of transferor
104. (1) On the request in writing of the transferor of any share,
debenture or other interest in a company, the company shall enter in the
appropriate register the name of the transferee in the same manner and
subject to the same conditions as if the application for the entry were
made by the transferee.
(2) On the request in writing of the transferor of a share or debenture
the company shall by notice in writing require the person having the
possession, custody or control of the share certificate or debenture and
the instrument of transfer thereof or either of them to bring the same into
the office of the company within a stated period, being not less than
seven and not more than twenty-eight days after the date of the notice,
to have the share certificate or debenture cancelled or rectified and the
transfer registered or otherwise dealt with.
(3) If any person refuses or neglects to comply with a notice given
under subsection (2), the transferor may apply to a judge to issue a
summons for that person to appear before the Court and show cause why
the documents mentioned in the notice should not be delivered up or
produced as required by the notice.
(4) Upon appearance of a person so summoned, the Court may
examine him upon oath and receive other evidence, or if he does not
appear after being duly served with the summons, the Court may receive
evidence in his absence and in either case the Court may order him to
deliver up the documents to the company upon such terms or conditions
as to the Court seem fit, and the costs of the summons and proceedings
thereon shall be in the discretion of the Court.
(5) Lists of share certificates or debentures called in under this
section and not brought in shall be exhibited in the office of the
company and shall be advertised in such newspapers and at such
times at the company thinks fit.
Notice of refusal to register transfer
105. (1) If a company refuses to register a transfer of any share,
debentures or other interests in the company it shall, within one month
after the date on which the transfer was lodged with it, send to the
transferor and to the transferee notice of the refusal.
Companies
179
(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: *One thousand ringgit. Default penalty.
Certification of transfers
106. (1) The certification by a company of any instrument of transfer
of shares, debentures or other interests in the company shall be taken as
a representation by the company to any person acting on the faith of the
certification that there have been produced to the company such
documents as on the face of them show a prima facie title to the shares,
debentures or other interests in the transferor named in the instrument of
transfer but not as a representation that the transferor has any title to the
shares, debentures or other interests.
(2) Where any person acts on the faith of a false certification by a
company made negligently, the company shall be under the same
liability to him as if the certification had been made fraudulently.
(3) Where any certification is expressed to be limited to forty-two
days or any longer period from the date of certification the company
and its officers shall not in the absence of fraud be liable in respect of the
registration of any transfer of shares debentures or other interests
comprised in the certification after the expiration of the period so
limited or any extension thereof given by the company if the instrument
of transfer has not within that period been lodged with the company for
registration.
(4) For the purposes of this section--
(a) an instrument of transfer shall be deemed to be certificated if
it bears the words "certificate lodged" or words to the like
effect;
(b) the certification of an instrument of transfer shall be deemed
to be made by a company if--
(i) the person issuing the instrument is a person
a p p a r e n t l y authorized to issue certificated
instruments of transfer on the company's behalf; and
(ii) the certification is signed by a person apparently
authorized to certificate transfers on the company's
behalf or by any officer either of the company or of a
corporation so apparently authorized; and
*NOTE--Previously "Two hundred and fifty ringgit"see Companies (Amendment) Act 1986 [Act A657].
Laws of Malaysia
180
ACT 125
(c) a certification that purports to be authenticated by a person's
signature or initials (whether hand-written or not) shall
be deemed to be signed by him unless it is shown that
the signature or initials were not placed there by him and
were not placed there by any other person apparently
authorized to use the signature or initials for the purpose
of certificating transfers on the company's behalf.
Duties of company with respect to issue of certificates
107. (1) Every company shall within two months after the allotment
of any of its shares or debentures, and within one month after the
date on which a transfer (other than such a transfer as the company
is for any reason entitled to refuse to register and does not register)
of any of its shares or debentures is lodged with the company,
complete and have ready for delivery all the appropriate certificates
and debentures in connection with the allotment or transfer.
(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: *One thousand ringgit. Default penalty.
Power of Court where default in issue of certificates
(3) If any company on which a notice has been served requiring
the company to make good any default in complying with this
section fails to make good the default within ten days after the
service of the notice, the Court may, on the application of the
person entitled to have the certificates or the debentures delivered
to him, make an order directing the company and any officer of
the company to make good the default within such time as is
specified in the order, and the order may provide that all costs of
and incidental to the application shall be borne by the company
or by any officer of the company in default in such proportions
as the Court thinks fit.
*NOTE--Previously "Two hundred and fifty ringgit"see Companies (Amendment) Act 1985 [Act A616].
Companies
181
DIVISION 6A
PROVISIONS APPLICABLE TO COMPANIES WHOSE SECURITIES
ARE DEPOSITED WITH THE CENTRAL DEPOSITORY
Interpretation
In this Division, unless the contrary intention appears--
107A.
"central depository" has the same meaning as is assigned to that
expression under subsection 2(1) of the Securities Industry (Central
Depositories) Act 1991;
"deposited securities" has the same meaning as is assigned to that
expression under subsection 2(1) of the Securities Industry (Central
Depositories) Act 1991;
"depositor" has the same meaning as is assigned to that expression
under subsection 2(1) of the Securities Industry (Central Depositories)
Act 1991;
"security" has the same meaning as is assigned to that expression
under subsection 2(1) of the Securities Industry (Central Depositories)
Act 1991;
"stock exchange" has the same meaning as is assigned to that
expression under subsection 2(1) of the Securities Industry Act 1983.
Depositor deemed to be member
107B. (1) Notwithstanding section 100, a depositor whose name
appears in the record of depositors maintained by the central depository
pursuant to section 34 of the Securities Industry (Central Depositories)
Act 1991 in respect of the securities of a company which have been
deposited with the central depository shall be deemed to be a member,
debenture holder, interest holder or option holder, as the case may be, of
the company, and shall, subject to the provisions of the Securities
Industry (Central Depositories) Act 1991 and any regulations made
thereunder, be entitled to the number of securities stated in the record of
depositors and all rights, benefits, powers and privileges and be subject
to all liabilities, duties and obligations in respect of, or arising from, such
securities (whether conferred or imposed by the Act or the memorandum
or articles of association of the company).
(2) Nothing in this Division shall be construed as affecting the
obligation of the company to keep a register of its members under
section 158, a register of holders of debentures under section 70, a
register of interest holders under section 92 and a register of option
holders under section 68A and to open them for inspection in accordance
Laws of Malaysia
182
ACT 125
with the provisions of this Act except that the company shall not be
obliged to enter in such registers the names and particulars of depositors
who are deemed to be members, debenture holders, interest holders or
option holders.
(3) Notwithstanding any other provision of this Act, a depositor
shall not be regarded as a member of a company entitled to attend any
general meeting and to speak and vote thereat unless his name appears
on the record of depositors not less than three market days before the
general meeting.
(4) The record of depositors shall be prima facie evidence of any
matters inserted therein as required or authorized by this Act.
(5) For the purpose of this section, "market day" means any day
between Mondays and Fridays which is not a market holiday of the
stock exchange or public holiday.
Transfer of securities is by way of book entry
107C. (1) On or after the coming into operation of this section, the
transfer of any securities or class of securities of a company whose
securities or any class of whose securities have been deposited with a
central depository shall be by way of book entry by the central depository
i n accordance with the rules of the central depository and,
notwithstanding sections 103 and 104, such company shall be precluded
from registering and effecting any transfer of securities or class of
securities which have been deposited.
(2) Subsection (1) shall not apply to a transfer of securities to a
central depository or its nominee company.
Rectification of record of depositors
107D. (1) Notwithstanding anything in this Act or any written law or
rule of law, no order shall be made by the Court for the rectification of
the record of depositors except in the circumstances and subject to the
conditions specified in subsection (2).
(2) If the Court is satisfied that--
(a) a depositor did not consent to a transfer of any securities; or
(b) a depositor should not have been registered as having title to
any securities,
it may award to the depositor mentioned in paragraph (a) or any person
who would have been entitled to be registered as having the title to such
securities, as the case may be, on such terms as the Court deems to be
equitable or make such other order as the Court deems fit, including an
order for the transfer of such securities to such depositor or person.
Companies
183
Non-application of section 223 to disposition made by way of book
entry
107E.  Section 223 shall not apply to a disposition of property made by
way of book entry by a central depository, but where the Court is
satisfied that a party to the disposition, other than the central depository,
had notice that a petition had been presented for the winding up of the
other party to the disposition, it may award damages against that party
on such terms as it thinks equitable or make such other orders as the
Court thinks fit, including an order for the transfer of deposited securities
by that party but not an order for the rectification of the record of
depositors.
Exemption from Division 6A
107F.  The Minister may, by notice published in the Gazette, exempt
any company or class of companies, subject to such terms and conditions
as he deems fit to impose, from complying with all or any provisions of
this Division in relation to any securities of a company or any class of
companies to which this Division applies and may, by notice published
in the Gazette, revoke such a notice or vary it in such manner as he thinks
fit.
DIVISION 7
REGISTRATION OF CHARGES
Registration of charges
108. (1) Subject to this Division where a charge to which this section
applies is created by a company, there shall be lodged with the Registrar
for registration within thirty days after the creation of the charge a
statement of the prescribed particulars, and if this section is not complied
with in relation to the charge, the charge shall, so far as any security on
the company's property or undertaking is thereby conferred, be void
against the liquidator and any creditor of the company.
(2) Nothing in subsection (1) shall prejudice any contract or obligation
for repayment of the money secured by a charge and when a charge
becomes void under this section, the money secured thereby shall
immediately become payable.
Laws of Malaysia
184
ACT 125
(3) The charges to which this section applies are--
(a) a charge to secure any issue of debentures;
(b) a charge on uncalled share capital of a company,
(c) a charge on shares of a subsidiary of the company which are
owned by the company;
(d) a charge or an assignment created or evidenced by an
instrument which if executed by an individual within Peninsular
Malaysia and affecting property within Peninsular Malaysia
would be invalid or of limited effect if not filed or registered
under the Bills of Sale Act, 1950 [Act 268];
(e) a charge on land wherever situate or any interest therein;
(f) a charge on book debts of the company;
(g) a floating charge on the undertaking or property of a company;
(h) a charge on calls made but not paid;
(i) a charge on a ship or aircraft or any share in a ship or aircraft;
(j) charge on goodwill, on a patent or licence under a patent, on
a trade mark, or on a copyright or a licence under a copyright;
and
(k) a charge on the credit balance of the company in any deposit
account.
(4) Where a charge created in Malaysia affects property outside
Malaysia, the statement of the prescribed particulars may be lodged
for registration under and in accordance with subsection (1)
notwithstanding that further proceedings may be necessary to make the
charge valid or effectual according to the law of the place in which the
property is situate.
(5) When a series of debentures containing or giving by reference to
any other instrument any charge to the benefit of which the debenture
holders of that series are entitled equally is created by a company, it shall
be sufficient if there are lodged with the Registrar for registration within
thirty days after the execution of the instrument containing the charge,
or if there is no such instrument after the execution of the first
debenture of the series, a statement containing the following particulars:
(a) the total amount secured by the whole series;
(b) the dates of the resolutions authorizing the issue of the series
and the date of the covering instrument , if any, by which the
security is created or defined;
Companies
185
(c) a general description of the property charged; and
(d) the names of the trustee, (if any), for the debenture holders.
(e)--(g) (Deleted by Act A836)
(6) For the purposes of subsection (5) where more than one issue is
made of debentures in the series there shall be lodged within thirty days
after each issue particulars of the date and amount of each issue, but an
omission so to do shall not affect the validity of the debentures issued.
(7) Where any commission, allowance or discount has been paid or
made either directly or indirectly by a company to any person in
consideration of his whether absolutely or conditionally subscribing or
agreeing to subscribe or procuring or agreeing to procure subscriptions,
whether absolute or conditional, for any debentures, the particulars
required to be lodged under this section shall include particulars as to
the amount or rate per centum of the commission, allowance or discount
so paid or made, but omission so to do shall not affect the validity of the
debentures issued.
(8) The deposit of any debentures as security for any debt of the
company shall not for the purposes of subsection (7) be treated as the
issue of the debentures at a discount.
(9) No charge or assignment to which this section applies (except a
charge or assignment relating to land) need be filed or registered under
any other written law.
(10) Where a charge requiring registration under this section is
created before the lapse of thirty days after the creation of a prior
unregistered charge, and comprises all or any part of the property
comprised in the prior charge, and the subsequent charge is given as a
security for the same debt as is secured by the prior charge, or any part
of that debt, then to the extent to which the subsequent charge is a
security for the same debt or part thereof, and so far as respects the
property comprised in the prior charge, the subsequent charge shall not
be operative or have any validity unless it is proved to the satisfaction of
the court that it was given in good faith for the purpose of correcting
some material error in the prior charge or under other proper
circumstances and not for the purposes of avoiding or evading the
provisions of this Division.
Laws of Malaysia
186
ACT 125
Duty to register charges
109. (1) Documents and particulars required to be lodged for registration
in accordance with section 108 may be lodged for registration by the
company concerned or by any person interested in the documents, but if
default is made in complying with that 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.
(2) Where registration is effected by some person other than the
company, that person shall be entitled to recover from the company the
amount of any fees properly paid by him on the registration.
Duty of company to register charges existing on property acquired
110. (1) Where a company acquires any property which is subject to a
charge of any such kind as would, if it had been created by the company
after the acquisition of the property, have been required to be registered
under this Division or, where a foreign company becomes registered in
Malaysia and has prior to such registration created a charge which if it
had been created by the company while it was registered in Malaysia
would have been required to be registered under this Division or, where
a foreign company becomes registered in Malaysia and has prior to such
registration acquired property which is subject to a charge of any such
kind as would if it had been created by the company after the acquisition
and while it was registered in Malaysia have been required to be
registered under this Division, the company shall cause a statement of
the prescribed particulars to be lodged with the Registrar for
registration within thirty days after the date on which the acquisition is
completed or the date of the registration of the company in Malaysia (as
the case may be).
(2) If default is made in complying with this section, the company
or the foreign company and every officer of the company or foreign
company who is in default shall be guilty of an offence against this Act.
Penalty: *One thousand ringgit. Default penalty.
*NOTE--Previously "Two hundred and fifty ringgit"see Companies (Amendment) Act 1985 [Act A616].
**NOTE--Previously "Two hundred and fifty ringgit"see Companies (Amendment) Act 1986 [Act A657].
Companies
187
Register of charges to be kept by Registrar
111. (1) The Registrar shall keep a register of all the charges lodged for
registration under this Division and shall enter in the register with
respect to those charges the following particulars:
(a) in the case of a charge to the benefit of which the holders of
a series of debentures are entitled, such particulars as are
required to be contained in a statement furnished under
subsection 108(5); and
(b) in the case of any other charge--
(i) if the charge is a charge created by the company, the
date of its creation, and if the charge was a charge
existing on property acquired by the company, the
date of the acquisition of the property;
(ii) the amount secured by the charge;
(iii) a description sufficient to identify the property
charged; and
(iv) the name of the person entitled to the charge.
(2) The Registrar shall issue a certificate of every registration and
the certificate shall be conclusive evidence that the requirements as to
registration have been complied with.
Endorsement of certificate of registration on debentures
112. (1) The company shall cause to be endorsed on every debenture
forming one of a series of debentures, or certificate of debenture stock
which is issued by the company and the payment of which is secured by
a charge so registered--
(a) a copy of the certificate of registration; or
(b) a statement that the registration has been effected and the
date of registration.
(2) Subsection (1) shall not apply to any debenture or certificate of
debenture stock which has been issued by the company before the
charge was registered.
Laws of Malaysia
188
ACT 125
(3) Every person who knowingly and wilfully authorizes or permits
the delivery of any debenture or certificate of debenture stock which is
not endorsed as required by this section shall be guilty of an offence
against this Act.
Penalty: *Two thousand ringgit.
Assignment and variation of charges
112A. (1) Where, after a charge on property of a company has been
created and registered under this Division, a person other than the
original chargee becomes the holder of the charge, the person who
becomes the holder of the charge shall, within thirty days after he
becomes the holder of the charge--
(a) lodge with the Registrar a notice in the prescribed form stating
that he has become the holder of the charge; and
(b) give the company a copy of the notice.
(2) Where, after a charge on property of a company has been created
and registered under this Division, there is a variation in the terms of the
charge having the effect of--
(a) increasing the amount of the debt or increasing the liabilities
(whether present or prospective) secured by the charge; or
(b) prohibiting or restricting the creation of subsequent charges
on the property,
the company shall, within thirty days after the variation occurs, lodge
with the Registrar a notice in the prescribed form setting out the
particulars of the variation.
(3) Where the amount of debt or liability secured by a registrable
charge created by the company is--
(a) unspecified; or
(b) specified with further advances,
any payment or advance made by the chargee to the company in
accordance with the terms of the charge shall not be regarded, for the
purpose of subsection (2), to be a variation in the terms of the charge.
*NOTE--Previously "five hundred ringgit"see Companies (Amendment) Act 1986 [Act A657].
Companies
189
(4) A reference in this section to the chargee in relation to a charge
shall, if the charge is constituted by a debenture or debentures and
there is a trustee for the debenture holders, be construed as a reference
to the trustee for debenture holders.
(5) 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.
Entries of satisfaction and release of property from charge
113. (1) Where, with respect to any registered charge--
(a) the debt for which the charge was given has been paid or
satisfied in whole or in part; or
(b) the property or undertaking charged or any part thereof has
been released from the charge or has ceased to form part of
the company's property or undertaking of the company
concerned,
the company may lodge with the Registrar in the prescribed form a
memorandum of satisfaction in whole or in part, or of the fact that the
property or undertaking or any part thereof has been released from the
charge or has ceased to form part of the company's property or
undertaking, as the case may be, and the Registrar shall enter particulars
of that memorandum in the register.
(2) The memorandum must be supported by evidence sufficient to
satisfy the Registrar of the payment, satisfaction, release or ceasing
referred to in subsection (1).
Extension of time and rectification of register of charges
114.  The Court, on being satisfied that the omission to register a
charge (whether under this or any corresponding previous written law)
within the time required or that the omission or misstatement of any
particular with respect to any such charge or in a memorandum of
satisfaction was accidental or due to inadvertence or to some other
sufficient cause or is not of a nature to prejudice the position of creditors
or shareholders or that on other grounds it is just and equitable to grant
relief, may, on the application of the company or any person interested
and on such terms and conditions as seem to the Court just and expedient
Laws of Malaysia
190
ACT 125
(including a term or condition that the extension or rectification is to
be without prejudice to any liability already incurred by the company or
any of its officers in respect of the default), order that the time for
registration be extended or that the omission or misstatement be rectified.
Company to keep copies of charging instruments and register of
charges
115. (1) Every company shall cause the instrument creating any charge
requiring registration under this Division or a copy thereof to be kept at
the registered office of the company but in the case of a series of
debentures the keeping of a copy of one debenture of the series shall be
sufficient for the purposes of this subsection.
(2) Every company shall keep at the registered office of the company
a register of charges and enter therein all charges specifically affecting
property of the company and all floating charges on the undertaking or
any property of the company, giving in each case a short description
of the property charged, the amount of the charge and (except in the case
of securities to bearer) the names of the persons entitled thereto.
(3) The instruments or copies thereof and the register of charges kept
in pursuance of this section shall be open to the inspection of any creditor
or member of the company without fee and the register of charges
shall also be open to the inspection of any other person on payment of
such fee not exceeding two ringgit for each inspection as is fixed by the
company.
(3A) Any person shall, on application to a company and on payment
of a fee not exceeding one ringgit for every page or part thereof, be
furnished with a copy of any instrument of charge or debenture kept
by the company in pursuance of this section within three days of his
making the application.
(4) 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. Default penalty.
Documents made out of Malaysia
116.  Where under this Division an instrument, deed, statement or
other document is required to be lodged with the Registrar within a
specified time, the time so specified shall, by force of this section, in
*NOTE--Previously "five hundred ringgit"see Companies (Amendment) Act 1986 [Act A657].
Companies
191
relation to an instrument, deed, statement or other document executed
or made in a place out of Malaysia, be extended by seven days or such
further period as the Registrar may from time to time allow.
Charges, etc., created before commencement of Act
117.  Except as is otherwise expressly provided this Division shall
apply to any charge that at the date of the commencement of this Act was
registrable under any of the repealed written laws but which at that date
was not registered under any of those laws.
Application of Division
118.  A reference in this Division to a company shall be read as
including a reference to a foreign company to which Division 2 of Part
XI applies, but nothing in this Division applies to a charge on property
outside Malaysia of a foreign company.
PART V
MANAGEMENT AND ADMINISTRATION
DIVISION 1
OFFICE AND NAME
Registered office of company
119. (1) A company shall as from the day on which it begin to carry on
business or as from the fourteenth day after the date of its incorporation,
whichever is the earlier, have a registered office within Malaysia to
which all communications and notices may be addressed and which shall
be open and accessible to the public for not less than three hours during
ordinary business hours on each day, Saturdays, weekly and public
holidays excepted.
(2) If default is made in complying with subsection (1) 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.
*NOTE--Previously "Two hundred and fifty ringgit"see Companies (Amendment) Act 1985 [Act A616].
Laws of Malaysia
192
ACT 125
Office hours
120. (1) Notice in the prescribed form of the situation of the registered
office, the days and hours during which it is open and accessible to the
public, and of any change therein shall be lodged with the Registrar
within one month after the date of incorporation or of any such change,
as the case may be, but no notice of the days and hours during which the
office is open and accessible to the public shall be required if the office
is open for at least five hours during ordinary business hours on each
day, Saturdays, weekly and public holidays excepted.
Penalty
(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: *One thousand ringgit. Default penalty.
Publication of name
121. (1) The name of the company (whether or not it is carrying on
business under a business name) in legible romanized letters and the
company number of the company shall appear on--
(a) its seal; and
(b) all business letters, statements of account, invoices, official
notices, publications, bills of exchange, promissory notes,
endorsements, cheques, orders, receipts and letters of credit of
or purporting to be issued or signed by or on behalf of, the
company,
and if default is made in complying with this subsection the company
shall be guilty of an offence against this Act.
(1A) Where a company has changed its name pursuant to section 23,
the former name of the company shall also appear beneath its present
name on all documents, business letters, statements of account, invoices,
official notices, publications, bills of exchange, promissory notes,
endorsements, cheques, orders, receipts and letters of credit of, or
purporting to be issued or signed by or on behalf of, the company for a
period of not less than twelve months from the date of the change, and
if default is made in complying with this subsection the company shall
be guilty of an offence against this Act.
*NOTE--Previously "Two hundred and fifty ringgit"see Companies (Amendment) Act 1985 [Act A616].
Companies
193
(2) If an officer of a company or any person on its behalf--
(a) uses or authorizes the use of any seal purporting to be a seal of
the company whereon its name does not so appear;
(b) issues or authorizes the issue of any business letter, statement
of account, invoice, official notice or publication of the
company wherein its name and former name (if applicable) is
not so mentioned; or
(c) signs issues or authorizes to be signed or issued on behalf of
the company any bill of exchange, promissory note, cheque or
other negotiable instrument or any endorsement, order, receipt
or letter of credit wherein its name and former name (if
applicable) is not so mentioned,
he shall be guilty of an offence against this Act, and where he has signed,
issued or authorized to be signed or issued on behalf of the company any
bill of exchange, promissory note or other negotiable instrument or any
endorsement thereon or order wherein that name and former name (if
applicable) is not so mentioned, he shall in addition be liable to the holder
of the instrument or order for the amount due thereon unless it is paid by
the company.
Name to be displayed on all offices
(3) Every company shall paint or affix and keep painted or affixed
on the outside of every office or place in which its business is carried on,
in a prominent position in romanized letters easily legible its name, and
also, in the case of the registered office, the words "Pejabat Yang
Didaftarkan" and if it fails so to do the company shall be guilty of an
offence against this Act.
Penalty: *One thousand ringgit. Default penalty.
(4) In this section, "company number" means the number allocated
by the Registrar to a company on its incorporation.
DIVISION 2
DIRECTORS AND OFFICERS
Directors
122. (1) Every company shall have at least two directors, who each has
his principal or only place of residence within Malaysia.
*NOTE--Previously "Two hundred and fifty ringgit"see Companies (Amendment) Act 1986 [Act A657].
Laws of Malaysia
194
ACT 125
(1A) In subsection (1), "director" shall not include an alternate or
substitute director.
(2) No person other than a natural person of full age shall be a director
of a company.
(3) The first directors of a company shall be named in the memorandum
or articles of the company.
(4) Any provision in the memorandum or articles of a company
which was in force immediately before the commencement of this Act
and which operated to constitute a corporation as a director of the
company shall be read and construed as if it authorized that corporation
to appoint a natural person to be a director of that company.
(5) On the commencement of this Act any corporation which holds
office as a director of a company shall cease to hold office and the
vacancy may be filled as a casual vacancy in accordance with the articles
of the company.
(6) Notwithstanding anything contained in this Act or in the
memorandum or articles of a company or in any agreement with a
company, a director of a company shall not resign or vacate his office if,
by his resignation or vacation from office, the number of directors of the
company is reduced below the minimum number required by subsection
(1) and any purported resignation or vacation of office in contravention
of this section shall be deemed to be invalid.
(7) Subsection (6) shall not apply where a director of a company is
required to resign or vacate his office if he has not within the period
referred to in subsection 124(1) obtained his qualification or by virtue of
his disqualification under this Act or any other written law.
Persons connected with a director
122A. (1) For the purposes of this Division a person shall be deemed to
be connected with a director if he is--
(a) a member of that director's family; or
(b) a body corporate which is associated with that director;
(c) a trustee of a trust (other than a trustee for an employee share
scheme or pension scheme) under which that director or a
member of his family is a beneficiary; or
Companies
195
(d) a partner of that director or a partner of a person connected
with that director.
(2) In paragraph (1)(a), "a member of that directors's family" shall
include his spouse, parent, child (including adopted child and stepchild),
brother, sister and the spouse of his child, brother or sister.
(3) For the purposes of paragraph (1)(b), a body corporate is associated
with a director if--
(a) the body corporate is accustomed or is under an obligation,
whether formal or informal, or its directors are accustomed, to
act in accordance with the directions, instructions or wishes of
that director;
(b) that director has a controlling interest in the body corporate;
or
(c) that director or persons connected with him, or that director
and persons connected with him, are entitled to exercise, or
control the exercise of, not less than fifteen per centum of the
votes attached to voting shares in the body corporate.
Restrictions on appointment or advertisement of director
123. (1) A person shall not be named as a director or proposed director
in the memorandum or articles of a company or in a prospectus or a
statement in lieu of prospectus, unless before the registration of the
memorandum or articles or the issue of the prospectus or the lodging of
the statement in lieu of prospectus (as the case may be) he has by himself
or by his agent authorized in writing for the purpose--
(a) signed the memorandum for a number of shares not less than
his qualification, if any;
(b) signed and lodged with the Registrar an undertaking in writing
to take from the company and pay for his qualification shares,
if any;
(c) made and lodged with the Registrar a statutory declaration to
the effect that a number of shares, not less than his qualification,
if any, is registered in his name; or
(d) (in the case of a company formed or intended to be formed by
way of reconstruction of another corporation or group of
corporations or to acquire the shares in another corporation or
group of corporations), made and lodged with the Registrar a
statutory declaration that he was a shareholder in that other
Laws of Malaysia
196
ACT 125
corporation or in one or more of the corporations of that group,
and that as a shareholder he will be entitled to receive and have
registered in his name a number of shares not less than his
qualification, by virtue of the terms of an agreement relating
to the reconstruction.
(2) Where a person has signed and lodged an undertaking to take and
pay for his qualification shares, he shall, as regards those shares, be in
the same position as if he had signed the memorandum for that number
of shares.
(3) The foregoing provisions of this section shall not apply to--
(a) a company not having a share capital;
(b) a private company; or
(c) a prospectus or a statement in lieu of prospectus issued or
lodged with the Registrar by or on behalf of a company or to
articles adopted by a company after the expiration of one year
from the date on which the company was entitled to commence
business.
(4) Every person shall before he is appointed a director of a company
make and lodge with the Registrar and the Official Receiver a statutory
declaration in the form prescribed by regulations that he will not be
acting in contravention of sections 125 and 130 and that he consents to
act as a director of the company.
Qualification of director
124. (1) Without affecting the operation of any of the preceding
provisions of this Division, every director, who is by the articles required
to hold a specified share qualification and who is not already qualified,
shall obtain his qualification within two months after his appointment or
such shorter period as is fixed by the articles.
(2) Unless otherwise provided by the articles the qualification of any
director of a company must be held by him solely and not as one of
several joint holders.
(3) A director shall vacate his office if he has not within the period
referred to in subsection (1) obtained his qualification or if after so
obtaining it he ceases at any time to hold his qualification.
Penalty: One thousand ringgit. Default penalty.
Companies
197
(4) A person vacating office under this section shall be incapable of
being reappointed as director until he has obtained his qualification.
Undischarged bankrupts acting as directors
125. (1) Every person who being an undischarged bankrupt acts as
director of, or directly or indirectly takes part in or is concerned in the
management of, any corporation except with the leave of the Court shall
be guilty of an offence against this Act.
Penalty: Imprisonment for five years or one hundred thousand ringgit
or both.
(2) The Court shall not give leave under this section unless notice of
intention to apply therefor has been served on the Minister and on the
Official Receiver and the Minister and the Official Receiver or either of
them may be represented at the hearing of and may oppose the granting
of the application.
Appointment of directors to be voted on individually
126. (1) At a general meeting of a public company, a motion for the
appointment of two or more persons as directors by a single resolution
shall not be made unless a resolution that it shall be so made has first been
agreed to by the meeting without any vote being given against it.
(2) A resolution passed in pursuance of a motion made in contravention
of this section shall be void, whether or not its being so moved was
objected to at the time.
(3) Where a resolution pursuant to a motion made in contravention of
this section is passed no provision for the automatic reappointment of
retiring directors in default of another appointment shall apply.
(4) For the purposes of this section, a motion for approving a person's
appointment or for nominating a person for appointment shall be treated
as a motion for his appointment.
(5) Nothing in this section shall apply to a resolution altering the
company's articles.
(6) Nothing in this section prevents the election of two or more
directors by ballot or poll.
Laws of Malaysia
198
ACT 125
Validity of acts of directors and officers
127.  The acts of a director or manager or secretary shall be valid
notwithstanding any defect that may afterwards be discovered in his
appointment or qualification.
Removal of directors
128. (1) A public company may by ordinary resolution remove a
director before the expiration of his period of office, notwithstanding
anything in its memorandum or articles or in any agreement between it
and him but where any director so removed was appointed to represent
the interests of any particular class of shareholders or debenture holders
the resolution to remove him shall not take effect until his successor has
been appointed.
(2) Notwithstanding anything to the contrary in the memorandum or
articles of the company, special notice shall be required of any resolution
to remove a director or to appoint some person in place of a director so
removed at the meeting at which he is removed, and on receipt of notice
of an intended resolution to remove a director the company shall
forthwith send a copy thereof to the director concerned, and the director
(whether or not he is a member of the company) shall be entitled to be
heard on the resolution at the meeting.
(3) Where notice is given pursuant to subsection (2) and the director
concerned makes with respect thereto representations in writing to the
company (not exceeding a reasonable length) and requests their
notification to members of the company, the company shall, unless the
representations are received by it too late for it to do so--
(a) in any notice of the resolution given to members of the
company state the fact of the representations having been
made; and
(b) send a copy of the representations to every member of the
company to whom notice of the meeting is sent (whether
before or after receipt of the representations by the company),
and if a copy of the representations is not so sent because they were
received too late or because of the company's default the director may
(without prejudice to his right to be heard orally) require that the
representations shall be read out at the meeting.
Companies
199
(4) N o t w i t h s t a n d i n g subsections (1) to (3), copies of the
representations need not be sent out and the representations need not be
read out at the meeting if, on the application either of the company or of
any other person who claims to be aggrieved, the Court is satisfied that
the rights conferred by this section are being abused to secure needless
publicity for defamatory matter and the Court may order the company's
costs on an application to be paid in whole or in part by the director,
notwithstanding that he is not a party to the application.
(5) A vacancy created by the removal of a director if not filled at the
meeting at which he is removed, may be filled as a casual vacancy.
(6) A person appointed director in place of a person removed shall be
treated, for the purpose of determining the time at which he or any other
director is to retire, as if he had become a director on the day on which
the person in whose place he is appointed was last appointed a director.
(7) Nothing in subsections (1) to (6) shall be taken as depriving a
person removed thereunder of compensation or damages payable to him
in respect of the termination of his appointment as director or of any
appointment terminating with that as director or as derogating from any
power to remove a director which may exist apart from this section.
(8) A director of a public company shall not be removed by, or be
required to vacate his office by reason of, any resolution request or notice
of the directors or any of them notwithstanding anything in the articles
or any agreement.
Age limit for directors
129. (1) Subject to this section but notwithstanding anything in the
memorandum or articles of the company no person of or over the age of
seventy years shall be appointed or act as a director of a public company
or of a subsidiary of a public company.
(2) The office of a director of a public company or of a subsidiary of
a public company shall become vacant at the conclusion of the annual
general meeting commencing next after he attains the age of seventy
years or if he has attained the age of seventy years before the
commencement of this Act at the conclusion of the annual general
meeting commencing next after the commencement of this Act.
(3) Any act done by a person as director shall be valid notwithstanding
that it is afterwards discovered that there was a defect in his appointment
or that his appointment had terminated by virtue of subsection (2).
Laws of Malaysia
200
ACT 125
(4) Where the office of a director has become vacant by virtue of
subsection (2) no provision for the automatic reappointment of retiring
directors in default of another appointment shall apply in relation to that
director.
(5) If any such vacancy has not been filled at the meeting at which the
office became vacant the office may be filled as a casual vacancy.
(6) Notwithstanding anything in this section a person of or over the
age of seventy years may by a resolution of which no shorter notice than
that required to be given to the members of the company of an annual
general meeting has been duly given, passed by a majority of not less
than three-fourths of such members of the company as being entitled so
to do vote in person or, where proxies are allowed, by proxy, at a general
meeting of that company, be appointed or reappointed as a director of
that company to hold office until the next annual general meeting of the
company or be authorized to continue in office as a director until the next
annual general meeting of the company.
(7) The provisions of section 147 relating to the demanding of a poll
and the holding of a poll shall apply to a resolution under this section.
(8) Nothing in this section shall limit or affect the operation of any
provision of the memorandum or articles of a company preventing any
person from being appointed a director or requiring any director to
vacate his office at any age less than seventy years.
(9) The provisions of the articles of a company relating to the rotation
and retirement of directors shall not apply to a director who is appointed
or reappointed pursuant to this section but such provisions of the articles
shall continue to apply to all other directors of the company.
Power to restrain certain persons from managing companies
130. (1) Where a person is convicted whether within or without
Malaysia--
(a) of any offence in connection with the promotion formation or
management of a corporation;
(b) of any offence involving fraud or dishonesty punishable on
conviction with imprisonment for three months or more; or
(c) of any offence under section 132, 132A or 303,