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(2) An application under this section shall be supported by such
evidence as the Minister requires as to the reasons for the application
and the motives of the applicants in requiring the investigation,
and the Minister may before appointing an inspector require the
applicants to give security to such amount as he thinks fit for
payment of the costs of the investigation.
As to reports of inspectors
198. (1) An inspector appointed by the Minister may, and if so
directed by the Minister shall, make interim reports to the Minister
and on the conclusion of the investigation the inspector shall
report his opinion on or in relation to the affairs that he has been
appointed to investigate together with the facts upon which his
opinion is based to the Minister, and a copy of the report shall be
forwarded by the Minister to the registered office of the company,
and a further copy shall at the request of the applicants be delivered
to them.
(2) The Minister may if he is of the opinion that it is necessary
in the public interest so to do cause the report to be printed and
published.
(3) If from any report of an inspector appointed by the Minister
it appears to the Minister that the case is one in which a prosecution
ought to be instituted he shall cause a prosecution to be instituted
accordingly and all officers and agents of the company (other than
the defendant in the proceedings) shall on being required by the
Minister so to do give all assistance in connection with the prosecution
which they are reasonably able to give.
(4) If from any report of an inspector appointed by the Minister
it appears to the Minister that proceedings ought in the public
interest to be brought by any company dealt with by the report for
the recovery of damages in respect of any fraud, misfeasance or
other misconduct in connection with the promotion or formation
of that company or in the management of its affairs or for the
recovery of any property of the company which has been misapplied
or wrongfully retained, he may himself bring proceedings for that
purpose in the name of the company.
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Investigation by resolution of company
199. (1) A company (not being a declared company) may by
special resolution appoint one or more inspectors to investigate its
affairs.
(2) On the conclusion of the investigation the inspector shall
report his opinion in such manner and to such persons as the
company in general meeting directs.
(3) The appointment of an inspector pursuant to this section
shall cease and determine forthwith upon a company becoming a
declared company.
Investigation of affairs of related corporation
199A.  Where an inspector thinks it necessary for the purposes of
the investigation of the affairs of a company to investigate the
affairs of a related corporation, he may, with the consent in writing
of the Minister, investigate the affairs of that corporation.
Procedure and costs of inquiry
200. (1) If an inspector appointed to investigate the affairs of a
company thinks it necessary for the purposes of the investigation
to investigate also the affairs of any other corporation which is or
has at any relevant time been deemed to be or to have been related
to that company by virtue of section 6 he shall have power so to
do, and he shall report on the affairs of the other corporation so
far as he thinks the results of the investigation thereof are relevant
to the investigation of the affairs of the company.
(2) Every officer and agent of a corporation the affairs of which
are being investigated under this Part shall, if required by an
inspector appointed under this Part, produce to the inspector all
books and documents in his custody or power and shall give to
the inspector all assistance in connection with the investigation
which he is reasonably able to give.
(3) An inspector may, by notice in the prescribed form, require
any officer or agent of any corporation whose affairs are being
investigated pursuant to this Part to appear for examination on
oath or affirmation (which he is hereby authorized to administer)
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in relation to its business; and the notice may require the production
of all books and documents in the custody or under the control of
that officer or agent.
(4) An inspector who pursuant to this section requires the
production of all books and documents in the custody or power
or under the control of an officer or agent of any corporation
whose affairs are being investigated under or pursuant to this
Part--
(a) may take possession of all the books and documents;
(b) may retain all the books and documents for such time as
he considers to be necessary for the purpose of the
investigation; and
(c) shall permit such corporation to have access at all reasonable
times to all the books and documents so long as they are
in his possession.
(5) If any officer or agent of any corporation the affairs of
which are being investigated pursuant to this Part fails to comply
with the requirements of any notice issued under subsection (3)
or fails or refuses to answer any question which is put to him by
an inspector with respect to the affairs of the corporation, the
inspector may certify the failure or refusal under his hand to the
Court, which may thereupon inquire into the case and, after hearing
any witnesses against or on behalf of the alleged offender and any
statement offered in defence, punish the offender in like manner
as if he had been guilty of contempt of court.
(6) No person who is or has formerly been an officer or agent
of a corporation the affairs of which are being investigated under
this Part shall be entitled to refuse to answer any question which
is relevant or material to the investigation on the ground that his
answer might tend to incriminate him but if he claims that the
answer to any question might incriminate him and but for this
subsection he would have been entitled to refuse to answer the
question, the answer to the question shall not be used in any
subsequent criminal proceedings except in the case of a charge
against him for making a false statement in answer to that question.
(7) Except as expressly provided in subsection (6) any person
shall be entitled to refuse to answer a question on the ground that
the answer might tend to incriminate him.
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(8) An inspector may cause notes of any examination under this
Part to be recorded and reduced to writing and to be read to or
by and signed by the person examined and any such signed notes
may, except in the case of any answer which that person would
not have been required to give but for subsection (6), thereafter
be used in evidence in any legal proceedings against that person.
As to costs of investigation under section 197
201. (1) The expenses of and incidental to an investigation by an
inspector appointed pursuant to section 197 (including the costs
of any proceedings brought by the Minister in the name of the
company), shall be paid by the company investigated or if the
Minister so directs by the applicants or in part by the company and
in part by the applicants.
(2) Notwithstanding subsection (1)--
(a) if the company fails to pay the whole or any of the sum
which it is so liable to pay, the applicants shall make
good the deficiency up to the amount by which the security
given by them under this Part exceeds the amount, if any,
which they have under subsection (1) been directed by
the Minister to pay; and
(b) any balance of the expenses not paid either by the company
or the applicants shall be paid out of moneys provided
by Parliament.
Report of inspector to be admissible in evidence
202.  A copy of the report of any inspector appointed under this
Part certified as correct by the Minister shall be admissible in any
legal proceedings as evidence of the opinion of the inspector and
of the facts upon which his opinion is based in relation to any
matter contained in the report.
Powers of inspector in relation to a declared company
203. (1) An inspector of a declared company may employ such
persons as he considers necessary and in writing authorize any
such person to do anything he could himself do, except to examine
on oath or affirmation.
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(2) Any officer or agent of a corporation who--
(a) refuses or fails to produce any book or document to any
person who produces a written authority of an inspector
given pursuant to subsection (1); or
(b) refuses or fails to answer any question lawfully put to
him by any such person,
shall be liable to be dealt with in the same manner as is provided
in subsection 200(5) for refusing or failing to comply with the
request of an inspector.
Suspension of actions and proceedings by declared company
204. (1) On and after the appointment of an inspector in respect
of any declared company until the expiration of three months after
the inspector has presented his final report to the Minister, no
action or proceeding shall without the consent of the Minister
(which may be given generally or in a particular case and which
may be given subject to such conditions and limitations as he
thinks fit) be commenced or proceeded with in any Court--
(a) by the company upon or in respect of any contract, bill
of exchange or promissory note; or
(b) by the holder or any other person in respect of any bill
of exchange or promissory note made, drawn or accepted
by or issued, transferred, negotiated or endorsed by or to
the company unless the holder or other person--
(i) at the time of the negotiation, transfer, issue,
endorsement or delivery thereof to him gave therefor
adequate pecuniary consideration; and
(ii) was not at the time of the negotiation, transfer,
issue, endorsement or delivery thereof to him or at
any time within three years before that time a member,
officer, agent or employee of the company or the
wife or husband of any member, officer, agent or
employee of the company.
(2) Any action or proceeding which is commenced or proceeded
with in contravention of this section shall be void and of no effect.
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Winding up of company
205. (1) Application to the Court--
(a) in the case of a company, for the winding up of the
company; or
(b) in the case of a foreign company, for the winding up so
far as the assets of the company within Malaysia are
concerned of the affairs of the company,
may be made on petition of the Minister at any time after a report
has been made in respect of a declared company by an inspector
whereupon this Act shall, with such adaptations as are necessary,
apply as if--
(c) (in the case of a company) a winding up petition had
been duly presented to the Court by the company; and
(d) (in the case of a foreign company) a petition for an
order for the affairs of the company so far as assets
within Malaysia are concerned to be wound up within
Malaysia had been duly presented to the Court by a
c r e d i t o r or contributory of the company upon the
liquidation of the company in the place in which it is
incorporated.
(2) Where (in the case of a foreign company) on any petition
under subsection (1) an order is made for the affairs of the company
so far as assets within Malaysia are concerned to be wound up
within Malaysia the company shall not carry on business or establish
or keep a place of business within Malaysia.
Penalties
206. (1) Any person who with intent to defeat the purposes of this
Part or to delay or obstruct the carrying out of an investigation
under this Part--
(a) destroys or alters any book, document or record of or
relating to a declared company; or
(b) sends or attempts to send or conspires with any other
person to send out of Malaysia any such book, document
or record or any property of any description belonging
to or in the disposition or under the control of such a
company,
shall be guilty of an offence against this Act.
Penalty: Imprisonment for *five years or thirty thousand ringgit.
*NOTE--Previously "two years and five thousand ringgit"see Companies (Amendment) Act 1986
[Act A657]
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(2) If in any prosecution for an offence against this section it
is proved that the person charged with the offence--
(a) has destroyed or altered any book, document or record
of or relating to the company; or
(b) has sent or attempted to send or conspired to send out
of Malaysia any book, document or record or any property
of any description belonging to or in the disposition or
under the control of the company,
the onus of proving that in so doing he had not acted with intent
to defeat the purposes of this Part or to delay or obstruct the
carrying out of an investigation under this Part shall lie on him.
Appointment and powers of inspectors to investigate ownership
of company
207. (1) Where it appears to the Minister that there is good reason
so to do, he may appoint one or more inspectors to investigate and
report on the membership of any corporation (whether or not it is
a declared company) and otherwise with respect to the corporation
for the purpose of determining the true persons who are or have
been financially interested in the success or failure (real or apparent)
of the corporation or able to control or materially to influence the
policy of the corporation.
(2) The appointment of an inspector under this section may
define the scope of his investigation, whether as respects the matters
or the period to which it is to extend or otherwise, and in particular
may limit the investigation to matters connected with particular
shares or debentures.
(3) Where an application for an investigation under this section
with respect to particular shares or debentures of a corporation is
made to the Minister by members of the corporation, and the
number of applicants or the amount of the shares held by them is
not less than that required for an application for the appointment
of an inspector under section 197, the Minister shall appoint an
inspector to conduct the investigation unless he is satisfied that the
application is vexatious, and the inspector's appointment shall not
exclude from the scope of his investigation any matter which the
application seeks to have included therein, except so far as the
Minister is satisfied that it is unreasonable for that matter to be
investigated.
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(4) Subject to the terms of an inspector's appointment, his powers
shall extend to the investigation of any circumstances suggesting
the existence of an arrangement or understanding which, though
not legally binding, is or was observed or likely to be observed
in practice and which is relevant to the purposes of his investigation.
(5) For the purposes of any investigation under this section the
provisions of this Part with respect to the investigation of declared
companies shall apply with the necessary modifications of references
to the affairs of the corporation or to those of any other corporation,
but so that --
(a) the Part shall apply in relation to all persons who are or
have been, or whom the inspector has reasonable cause
to believe to be or to have been financially interested in
the success or failure or the apparent success or failure
of the corporation or any other corporation the membership
of which is investigated with that of the corporation, or
able to control or materially to influence the policy thereof,
including persons concerned only on behalf of others, as
they apply in relation to officers and agents of the
corporation or of the other corporation, as the case may
be; and
(b) the Minister shall not be bound to furnish the corporation
or any other person with a copy of any report by an
inspector appointed under this section or with a complete
copy thereof if he is of opinion that there is good reason
for not divulging the contents of the report or of parts
thereof, but shall cause to be kept by the Registrar a copy
of the report or, as the case may be, the parts of the
report, as respects which he is not of that opinion.
Power to require information as to persons interested in shares
or debentures
208. (1) Where it appears to the Minister that there is good reason
so to do, he may appoint one or more inspectors to investigate and
report on the ownership of any shares in or debentures of a corporation
or on the circumstances under which a person acquired or disposed
of or became entitled to acquire or dispose of any shares in or
debentures of a corporation whether the corporation is a declared
company or not.
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(2) An inspector may, by notice in writing, require any person
whom he has reasonable cause to believe to be capable of giving
any information in connection with an investigation conducted
under subsection (1) to appear for examination and to give to the
inspector any information in connection with the investigation that
person has or can reasonably be expected to obtain.
(3) A notice under subsection (2) may require the production
of all books and documents relevant to the investigation which are
in the custody or under the control of the person to whom the
notice is addressed.
(4) An inspector who pursuant to this section requires the
production of all books and documents in the custody or power
or under the control of an officer or agent of any corporation
whose affairs are being investigated under or pursuant to this
section--
(a) may take possession of all such books and documents;
(b) may retain all such books and documents for such time
as he considers to be necessary for the purpose of the
investigation; and
(c) shall permit the corporation to have access at all reasonable
times to all such books and documents so long as they
are in his possession.
(5) Any person who fails to comply with the requirements of
any notice issued under subsection (3) or who fails to give any
information required of him under this section, or who in giving
any such information makes any statement which he knows to be
false in a material particular, or recklessly makes any statement
which is false in a material particular, shall be guilty of an offence
against this Act.
Penalty: Imprisonment for *three years or ten thousand ringgit
or both.
(6) No person who is or has formerly been an officer or agent
of a corporation the affairs of which are being investigated under
this section shall be entitled to refuse to answer any question
which is relevant or material to the investigation on the ground
that his answer might tend to incriminate him but if he claims that
the answer to any question might incriminate him and but for this
*NOTE--Previously "twelve months or two thousand five hundred ringgit"see Companies
(Amendment) Act 1986 [Act A657]
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subsection he would have been entitled to refuse to answer the
question shall not be used in any subsequent criminal proceedings
except in the case of a charge against him for perjury committed
by him in answer to that question.
(7) Except as expressly provided in subsection (5) any person
shall be entitled to refuse to answer a question on the ground that
the answer might tend to incriminate him.
Power to require information as to persons interested in shares
or debentures
208A. (1) Where it appears to the Minister that there is good
reason to investigate the ownership of any shares in or debentures
of a corporation and that it is unnecessary to appoint an inspector
for the purpose, he may require any person whom he has reasonable
cause to believe--
(a) to be or to have been interested in those shares or debentures;
or
(b) to act or to have acted in relation to those shares or
debentures as the agent of someone interested therein,
to give him any information which he has or can reasonably be
expected to obtain as to the present and past interests in those
shares or debentures and the names and addresses of the persons
interested and of any person who act or have acted on their behalf
in relation to the shares or debentures.
(2) For the purposes of this section, a person shall be deemed
to have an interest in a share or debenture if he has any right to
acquire or dispose of the share or debenture or any interest therein
or to vote in respect thereof, or if his consent is necessary for the
exercise of any of the rights of other persons interested therein,
or if the persons interested therein can be required or are accustomed
to exercise their rights in accordance with his instructions.
(3) Any person who fails to give any information required of
him under this section, or who in giving any such information
makes any statement which he knows to be false in a material
particular, or recklessly makes any statement which is false in a
material particular, shall be guilty of an offence against this Act.
Penalty: Imprisonment for twelve months or ten thousand ringgit.
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(4) This section shall apply to an insurance company but nothing
herein shall, subject to the provisions of the *Insurance Act 1963
[Act 89], require disclosure by an insurance company to the Minister
of any information as to the affairs of any of its customers other
than the corporation of which it is the insurer.
Power to impose restrictions on shares or debentures
209. (1) Where in connection with an investigation under section
207 or 208, it appears to the Minister that there is difficulty in
finding out the relevant facts about any shares (whether issued or
to be issued), and that the difficulty is due wholly or mainly to
the unwillingness of the persons concerned or any of them to assist
the investigation as required by this Act, the Minister may by
notice published in the Gazette direct that the shares are until
further notice subject to the following restrictions:
(a) that any transfer of those shares or any exercise of the
right to acquire or dispose of those shares or in the case
of unissued shares any transfer of the right to be issued
therewith and any issue thereof, shall be void;
(b) that no voting rights shall be exercisable in respect of
those shares;
(c) that no further shares shall be issued in right of those
shares or in pursuance of any offer made to the holder
thereof; and
(d) that except in a liquidation, no payment shall be made
of any sums due from the company on those shares,
whether in respect of capital or otherwise.
(2) Where the Minister gives notice directing that shares are
subject to all or any of the restrictions referred to in subsection
(1) or, having given such a notice in relation to any shares, refuses
to make an order directing that the shares shall cease to be subject
to those restrictions, any person aggrieved thereby may apply to
the Yang di-Pertuan Agong who may, if he sees fit, direct that the
shares shall cease to be subject to those restrictions.
*NOTE--The Insurance Act 1963 [Act 89] has since been repealed by the Insurance Act 1996
[Act 553]--see s. 214 of Act 553.
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(3) Any order of the Minister or of the Yang di-Pertuan Agong
directing that shares shall cease to be subject to the restrictions
referred to in subsection (1) which is expressed to be made with
a view to permitting a transfer of those shares may continue the
application of paragraphs (1)(c) and (d), in relation to those shares,
either in whole or in part, so far as those paragraphs relate to any
right acquired or offer made before the transfer.
(4) Where any shares are for the time being subject to any
restrictions referred to in subsection (1), any person who--
(a) having knowledge that the shares are subject to any such
restrictions, exercises or purports to exercise any right to
dispose of those shares, or of any right to be issued with
the shares;
(b) votes in respect of those shares, whether as holder or
proxy, or appoints a proxy to vote in respect thereof; or
(c) being the holder of any of those shares, fails to notify the
fact of their being subject to those restrictions to any
person whom he does not know to be aware of that fact
but does know to be entitled, apart from those restrictions,
to vote in respect of those shares whether as holder or
proxy,
shall be guilty of an offence against this Act.
Penalty: Imprisonment for twelve months or two thousand five
hundred ringgit or both.
(5) Where shares in any company are issued in contravention
of the restrictions imposed pursuant to subsection (1) the company
and every officer of the company who is in default shall be guilty
of an offence against this Act.
Penalty: Imprisonment for *three years or ten thousand ringgit.
(6) A prosecution shall not be instituted under this section except
by or with the consent of the Minister.
(7) This section shall apply in relation to debentures as it applies
in relation to shares.
*NOTE--Previously "twelve months or two thousand five hundred ringgit"see Companies
(Amendment) Act 1986 [Act A657]
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Inspectors appointed in other countries
Where--
210.
(a) under a corresponding law of another country an inspector
has been appointed to investigate the affairs of a corporation;
and
(b) the Minister is of the opinion that, in connection with
that investigation, it is expedient that an investigation be
made in Malaysia,
the Minister may by notice declare that the inspector so appointed
shall have the same powers and duties in Malaysia in relation to
the investigation as if the corporation were a declared company
and the inspector had been appointed under section 196 and thereupon
the inspector shall have those powers and duties.
PART X
WINDING UP
DIVISION 1
PRELIMINARY
Modes of winding up
The winding up of a company may be either--
211.
(a) by the Court; or
(b) voluntary.
Application of winding up provisions
212.  Unless inconsistent with the context or subject matter the
provisions of this Act with respect to winding up apply to the
winding up of a company in either of those modes.
Government bound by certain provisions
213.  The provisions of this Part relating to the remedies against
the property of a company, the priorities of debts and the effect
of an arrangement with creditors shall bind the Government.
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Liability as contributories of present and past members
214. (1) On a company being wound up, every present and past
member shall be liable to contribute to the assets of the company
to an amount sufficient for payment of its debts and liabilities and
the costs, charges and expenses of the winding up and for the
adjustment of the rights of the contributories among themselves,
subject to subsection (2) and the following qualifications:
(a) a past member shall not be liable to contribute if he has
ceased to be a member for one year or more before the
commencement of the winding up;
(b) a past member shall not be liable to contribute in respect
of any debt or liability of the company contracted after
he ceased to be a member;
(c) a past member shall not be liable to contribute unless it
appears to the Court that the existing members are unable
to satisfy the contributions required to be made by them
in pursuance of this Act;
(d) in the case of a company limited by shares, no contribution
shall be required from any member exceeding the amount,
if any, unpaid on the shares in respect of which he is
liable as a present or past member;
(e) in the case of a company limited by guarantee, no
contribution shall, subject to subsection (4), be required
from any member exceeding the amount undertaken to
be contributed by him to the assets of the company in the
event of its being wound up;
(f) nothing in this Act shall invalidate any provision contained
in any policy of insurance or other contract whereby the
liability of individual members on the policy or contract
is restricted or whereby the funds of the company are
alone made liable in respect of the policy or contract;
(g) a sum due to any member in his character of a member
by way of dividends, profits or otherwise shall not be a
debt of the company payable to that member in a case
of competition between himself and any other creditor
not a member, but any such sum may be taken into
account for the purpose of the final adjustment of the
rights of the contributories among themselves.
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Unlimited liability of directors
(2) In the winding up of a limited company any director, whether
past or present, whose liability is unlimited shall in addition to his
liability, if any, to contribute as an ordinary member be liable to
make a further contribution as if he were, at the commencement
of the winding up, a member of an unlimited company.
(3) Notwithstanding anything in subsection (2)--
(a) a past director shall not be liable to make a further
contribution if he has ceased to hold office for a year or
more before the commencement of the winding up;
(b) a past director shall not be liable to make a further
contribution in respect of any debt or liability of the
company contracted after he ceased to hold office; and
(c) subject to the articles of the company, a director shall not
be liable to make a further contribution, unless the Court
deems it necessary to require that contribution in order
to satisfy the debts and liabilities of the company and the
costs charges and expenses of the winding up.
(4) On the winding up of a company limited both by shares and
guarantee every member shall be liable, in addition to the amount
undertaken to be contributed by him to the assets of the company
in the event of its being wound up, to contribute to the extent of
any sums unpaid on any shares held by him.
Nature of liability of contributory
215.  The liability of a contributory shall create a debt accruing
due from him at the time when his liability commenced but payable
at the times when calls are made for enforcing the liability.
Contributories in the case of death of member
216. (1) If a contributory dies, either before or after he has been
placed on the list of contributories, his personal representatives
shall be liable in due course of administration to contribute to the
assets of the company in discharge of his liability and shall be
contributories accordingly, and if they make default in paying any
money ordered to be paid by them proceedings may be taken for
administering the estate of the deceased contributory and for
compelling payment thereout of the money due.
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Contributories in case of bankruptcy of member
(2) If a contributory becomes bankrupt or assigns his estate for
the benefit of his creditors, either before or after he has been
placed on the list of contributories--
(a) his trustee shall represent him for all the purposes of the
winding up and shall be a contributory accordingly; and
(b) there may be proved against his estate the estimated
value of his liability to future calls as well as calls already
made.
DIVISION 2
WINDING UP BY THE COURT
Subdivision (1)--General
Application of winding up
217. (1) A company (whether or not it is being wound up voluntarily)
may be wound up under an order of the Court on the petition of--
(a) the company;
(b) any creditor, including a contingent or prospective creditor,
of the company;
(c) a contributory or any person who is the personal
representative of a deceased contributory or the trustee
in bankruptcy or the Director General of Insolvency of
the estate of a bankrupt contributory;
(d) the liquidator;
(e) the Minister pursuant to section 205 or on the ground
specified in paragraph 218(1)(d);
(f) in the case of a company which is a licensed institution,
or a scheduled institution in respect of which the Minister
charged with responsibility for finance has made an order
under subsection 24(1) of the Banking and Financial
Institutions Act 1989, or a non-scheduled institution in
respect of which such Minister has made an order under
subsection 93(1) of that Act, Bank Negara Malaysia;
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(g) in the case of a company which is licensed under the
Insurance Act 1996 [Act 553], Bank Negara Malaysia;
(h) the Registrar on the ground specified in paragraph 218(1)(m)
or (n),
or of any two or more of those parties.
(2) Notwithstanding anything in subsection (1)--
(a) a person referred to in paragraph (1)(c) may not present
a petition on any of the grounds specified in paragraph
218(a), (b), (c), (e) or (i) unless--
(i) the number of members of the company (not being
a company the whole of the issued shares of which
is held by a holding company) is reduced below
two; or
(ii) the share in respect of which the contributor was
a contributory or some of them were originally
allotted to the contributor, or have been held by
him and registered in his name for at least six
months during the eighteen months before the
presentation of the petition or have devolved on
him through the death or bankruptcy of a former
holder;
(b) a petition shall not, if the ground of the petition is default
in lodging the statutory report or in holding the statutory
meeting, be presented by any person except a contributory
or the Minister nor before the expiration of fourteen days
after the last day on which the meeting ought to have
been held;
(c) the Court shall not hear the petition if presented by a
contingent, or prospective creditor until such security for
costs has been given as the Court thinks reasonable and
a prima facie case for winding up has been established
to the satisfaction of the Court; and
(d) the Court shall not, where a company is being wound up
voluntarily, make a winding up order unless it is satisfied
that the voluntary winding up cannot be continued with
due regard to the interests of the creditors or contributories.
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Circumstances in which company may be wound up by Court
218. (1) The Court may order the winding up if--
(a) the company has by special resolution resolved that it be
wound up by the Court;
(b) default is made by the company in lodging the statutory
report or in holding the statutory meeting;
(c) the company does not commence business within a year
from its incorporation or suspends its business for a whole
year;
(d) the number of members is reduced in the case of a company
(other than a company the whole of the issued shares in
which are held by a holding company) below two;
(e) the company is unable to pay its debts;
(f) the directors have acted in the affairs of the company in
their own interests rather than in the interests of the
members as a whole, or in any other manner whatsoever
which appears to be unfair or unjust to other members;
(g) an inspector appointed under Part IX has reported that he
is of opinion--
(i) that the company cannot pay its debts and should
be wound up; or
(ii) that it is in the interests of the public or of the
shareholders or of the creditors that the company
should be wound up;
(h) when the period, if any, fixed for the duration of the
company by the memorandum or articles expires or the
event, if any, occurs on the occurrence of which the
memorandum or articles provide that the company is to
be dissolved;
(i) the Court is of opinion that it is just and equitable that
the company be wound up;
(j) the company has held a licence under the Banking and
Financial Institutions Act 1989 or the Islamic Banking
Act 1983, and that licence has been revoked or surrendered;
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(k) the company has carried on Islamic banking business,
licensed business, or scheduled business, or it has accepted,
received or taken deposits in Malaysia, in contravention
of the Islamic Banking Act 1983 or the Banking and
Financial Institutions Act 1989, as the case may be; or
(l) the company has held a licence under the Insurance Act
1996 and--
(i) that licence has been revoked;
(ii) Bank Negara Malaysia has petitioned for its winding
up under subsection 58(4) of the Insurance Act
1996; or
(iii) an order under paragraph 59(4)(b) of the Insurance
Act 1996 has been made in respect of it;
(m) the company is being used for unlawful purposes or any
purpose prejudicial to or incompatible with peace, welfare,
security, public order, good order or morality in Malaysia;
or
(n) the company is being used for any purpose prejudicial to
national security or public interest.
Definition of inability to pay debts
(2) A company shall be deemed to be unable to pay its debts
if--
(a) a creditor by assignment or otherwise to whom the company
is indebted in a sum exceeding five hundred ringgit then
due has served on the company by leaving at the registered
office a demand under his hand or under the hand of his
agent thereunto lawfully authorized requiring the company
to pay the sum so due, and the company has for three
weeks thereafter neglected to pay the sum or to secure
or compound for it to the reasonable satisfaction of the
creditor;
(b) execution or other process issued on a judgment, decree
or order of any court in favour of a creditor of the company
is returned unsatisfied in whole or in part; or
(c) it is proved to the satisfaction of the Court that the company
is unable to pay its debts; and in determining whether a
company is unable to pay its debts the Court shall take
into account the contingent and prospective liabilities of
the company.
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Commencement of winding up by the Court
219. (1) Where before the presentation of the petition a resolution
has been passed by the company for voluntary winding up, the
winding up of the company shall be deemed to have commenced
at the time of the passing of the resolution, and, unless the Court
on proof of fraud or mistake thinks fit otherwise to direct, all
proceedings taken in the voluntary winding up shall be deemed to
have been validly taken.
(2) In any other case the winding up shall be deemed to have
commenced at the time of the presentation of the petition for the
winding up.
As to payment of preliminary costs, etc., by petitioner (other
than company or liquidator)
220. (1) The persons, other than the company itself or the liquidator
thereof, on whose petition any winding up order is made, shall at
their own cost prosecute all proceedings in the winding up until
a liquidator has been appointed under this Part.
(2) The liquidator shall, unless the Court orders otherwise,
reimburse the petitioner out of the assets of the company the taxed
costs incurred by the petitioner in any such proceedings.
(3) Where the company has no assets or not sufficient assets,
and in the opinion of the Minister any fraud has been committed
by any person in the promotion or formation of the company or
by any officer of the company in relation to the company since
the formation thereof, the taxed costs or so much of them as is not
so reimbursed may, with the approval in writing of the Minister,
to an extent specified by the Minister but not in any case exceeding
seven hundred and fifty ringgit, be reimbursed to the petitioner out
of moneys provided by Parliament for the purpose.
As to costs when order made on petition of company or liquidator
(4) Where any winding up order is made upon the petition of
the company or the liquidator thereof, the costs incurred shall,
subject to any order of the Court, be paid out of the assets of the
company in like manner as if they were the costs of any other
petitioner.
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Powers of Court on hearing petition
221. (1) On hearing a winding up petition the Court may dismiss
it with or without costs or adjourn the hearing conditionally or
unconditionally or make any interim or other order that it thinks
fit, but the Court shall not refuse to make winding up order on the
ground only that the assets of the company have been mortgaged
to an amount equal to or in excess of those assets or that the
company has no assets or in the case of a petition by a contributory
that there will be no assets available for distribution amongst the
contributories.
(2) The Court may on the petition coming on for hearing or at
any time on the application of the petitioner, the company, or any
person who has given notice that he intends to appear on the
hearing of the petition--
(a) direct that any notices be given or any steps taken before
or after the hearing of the petition;
(b) dispense with any notices being given or steps being
taken which are required by this Act, or by the rules, or
by any prior order of the Court;
(c) direct that oral evidence be taken on the petition or any
matter relating thereto;
(d) direct a speedy hearing or trial of the petition or any
issue or matter;
(e) allow the petition to be amended or withdrawn; and
(f) give such directions as to the proceedings as the Court
thinks fit.
(3) Where the petition is presented on the ground of default in
lodging the statutory report or in holding the statutory meeting, the
Court may instead of making a winding up order, direct that the
statutory report shall be lodged or that a meeting shall be held and
may order the costs to be paid by any persons who, in the opinion
of the Court, are responsible for the default.
Power to stay or restrain proceedings against company
222.  At any time after the presentation of a winding up petition
and before a winding up order has been made, the company or any
creditor or contributory may, where any action or proceeding against
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the company is pending, apply to the Court to stay or restrain
further proceedings in the action or proceeding, and the Court may
stay or restrain the proceedings accordingly on such terms as it
thinks fit.
Avoidance of dispositions of property, etc.
223.  Any disposition of the property of the company including
things in action and any transfer of shares or alteration in the status
of the members of the company made after the commencement of
the winding up by the Court shall unless the Court otherwise
orders be void.
Avoidance of certain attachments, etc.
224.  Any attachment, sequestration, distress or execution put in
force against the estate or effects of the company after the
commencement of the winding up by the Court shall be void.
Petition to be lis pendens
225.  Any petition for winding up a company shall constitute a
lis pendens within the meaning of any law relating to the effect
of a lis pendens upon purchasers or mortgagees.
Copy of order to be lodged, etc.
226. (1) Within seven days after the making of a winding up
order the petitioner shall lodge with the Registrar notice of--
(a) the order and its date; and
(b) the name and address of the liquidator.
(2) On the passing and entering of the winding up order the
petitioner shall within seven days--
(a) lodge an office copy of the order with the Registrar and
with the Official Receiver;
(b) cause a copy to be served upon the secretary of the
company or upon such other person or in such manner
as the Court directs; and
(c) deliver a copy to the liquidator with a statement that the
requirements of this subsection have been complied with.
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Actions stayed on winding up order
(3) When a winding up order has been made or a provisional
liquidator has been appointed no action or proceeding shall be
proceeded with or commenced against the company except--
(a) by leave of the Court; and
(b) in accordance with such terms as the Court imposes.
Effect of order
(4) An order for winding up a company shall operate in favour
of all the creditors and contributories of the company as if made
on the joint petition of a creditor and of a contributory.
(5) If default is made in complying with subsection (1) or (2)
the petitioner shall be guilty of an offence against this Act.
Penalty: *One thousand ringgit. Default penalty.
Subdivision (2)--Liquidators
Appointment, style, etc., of liquidators
227.  The following provisions with respect to liquidators shall
have effect on a winding up order being made:
(1) if an approved liquidator other than the Official Receiver
is not appointed to be the liquidator of the company the
Official Receiver shall by virtue of his office become the
provisional liquidator and shall continue to act as such until
he or another person becomes liquidator and is capable of
acting as such;
(2) if there is no liquidator appointed the Official Receiver
s h a l l summon separate meetings of the creditors and
contributories of the company for the purpose of determining
whether or not an application is to be made to the Court
for appointing a liquidator in the place of the Official Receiver;
*NOTE--Previously "two hundred and fifty ringgit"see Companies (Amendment) Act 1986
[Act A657].
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(3) the Court may make any appointment and order required
to give effect to any such determination, and, if there is a
difference between the determinations of the meetings of
the creditors and contributories in respect of the matter
aforesaid, the Court shall decide the difference and make
such order thereon as the Court may think fit;
(4) in a case where a liquidator is not appointed by the Court,
the Official Receiver shall be the liquidator of the company;
(5) the Official Receiver shall by virtue of his office be the
liquidator during any vacancy;
(6) any vacancy in the office of a liquidator appointed by the
Court may be filled by the Court;
(7) a liquidator shall be described, where a person other than
the Official Receiver is liquidator, by the style of "the
liquidator", and, where the Official Receiver is liquidator,
by the style of "the Official Receiver and liquidator", of the
particular company in respect of which he is appointed, and
not by his individual name.
Provisions where person other than Official Receiver is appointed
liquidator
228.  Where in the winding up of a company by the Court a
person other than the Official Receiver is appointed liquidator,
that person--
(a) shall not be capable of acting as liquidator until he has
notified his appointment to the Registrar and given security
in the prescribed manner to the satisfaction of the Official
Receiver; and
(b) shall give the Official Receiver such information and
such access to and facilities for inspecting the books and
documents of the company, and generally such aid as
may be requisite for enabling that officer to perform his
duties under this Act.
Control of unofficial liquidators by Official Receiver
229. (1) Where in the winding up of a company by the Court a
person other than the Official Receiver is the liquidator, the Official
Receiver shall take cognizance of his conduct and if the liquidator
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does not faithfully perform his duties and duly observe all the
requirements imposed on him by any written law or otherwise with
respect to the performance of his duties, or if any complaint is
made to the Official Receiver by any creditor or contributory in
regard thereto, the Official Receiver shall inquire into the matter,
and take such action thereon as he may think expedient.
(2) The Official Receiver may at any time require any such
liquidator of a company which is being wound up by the Court to
answer any inquiry in relation to any winding up in which he is
engaged, and may, if the Official Receiver thinks fit, apply to the
Court to examine him or any other person on oath concerning the
winding up.
(3) The Official Receiver may also direct a local investigation
to be made of the books and vouchers of such liquidator.
Control of Official Receivers by Minister
230.  The Minister shall take cognizance of the conduct of the
Official Receiver and of all Assistant Official Receivers who are
concerned in the liquidation of companies, and if any such person
does not faithfully perform his duties and duly observe all the
requirements imposed on him by any written law or otherwise with
respect to the performance of his duties, or if any complaint is
made to the Minister by any creditor or contributory in regard
thereto, the Minister shall inquire into the matter, and take such
action thereon as he may think expedient, and may direct a
local investigation to be made of the books and vouchers of that
person.
Provisional liquidator
231.  The Court may appoint the Official Receiver or an approved
liquidator provisionally at any time after the presentation of a
winding up petition and before the making of a winding up order
and the provisional liquidator shall have and may exercise all the
functions and powers of a liquidator subject to such limitations
and restrictions as may be prescribed by the rules or as the Court
may specify in the order appointing him.
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General provisions as to liquidators
232. (1) A liquidator appointed by the Court may resign or on
cause shown be removed by the Court.
(2) A provisional liquidator other than the Official Receiver
shall be entitled to receive such salary or remuneration by way of
percentage or otherwise as is determined by the Court.
(3) A liquidator other than the Official Receiver shall be entitled
to receive such salary or remuneration by way of percentage or
otherwise as is determined--
(a) by agreement between the liquidator and the committee
of inspection, if any;
(b) failing such agreement or where there is no committee
of inspection by a resolution passed at a meeting of
creditors by a majority of not less than three-fourths in
value and one-half in number of the creditors present in
person or by proxy and voting at the meeting and whose
debts have been admitted to vote, which meeting shall be
convened by the liquidator by a notice to each creditor
to which notice shall be attached a statement of all receipts
and expenditure by the liquidator and the amount of
remuneration sought by him; or
(c) failing a determination in a manner referred to in paragraph
(a) or (b), by the Court.
(4) Where the salary or remuneration of a liquidator is determined
in the manner specified in paragraph (3)(a) the Court may, on the
application of a member whose shareholding represent in the
aggregate not less than ten per centum of the issued capital of the
company, confirm or vary the determination.
(5) Where the salary or remuneration of a liquidator is determined
in the manner specified in paragraph (3)(b) the Court may, on the
application of the liquidator or a member referred to in subsection
(4), confirm or vary the determination.
(6) Subject to any order of the Court the Official Receiver when
acting as a liquidator or provisional liquidator of a company shall
be entitled to receive such salary or remuneration by way of percentage
or otherwise as is prescribed.
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(7) If more than one liquidator is appointed by the Court, the
Court shall declare whether anything by this Act required or
authorized to be done by the liquidator is to be done by all or any
one or more of the persons appointed.
(8) Subject to this Act the acts of a liquidator shall be valid
notwithstanding any defects that may afterwards be discovered in
his appointment or qualification.
Custody and vesting of company's property
233. (1) Where a winding up order has been made or a provisional
liquidator has been appointed, the liquidator or provisional liquidator
shall take into his custody or under his control all the property and
things in action to which the company is or appears to be entitled.
(2) The Court may, on the application of the liquidator, by
order direct that all or any part of the property of whatsoever
description belonging to the company or held by trustees on its
behalf shall vest in the liquidator and thereupon the property to
which the order relates shall vest accordingly and the liquidator
may, after giving such indemnity, if any, as the Court directs,
bring or defend any action or other legal proceeding which relates
to that property or which it is necessary to bring or defend for the
purpose of effectually winding up the company and recovering its
property.
(3) Where an order is made under this section every liquidator
of a company in relation to which the order is made shall lodge
within seven days of the making of the order--
(a) an office copy of the order with the Registrar; and
(b) where the order relates to land, an office copy of the
order with the appropriate authority concerned with the
registration or recording of dealings in that land,
and every liquidator who makes default in complying with this
section shall be guilty of an offence against this Act.
Penalty: *Two thousand ringgit. Default penalty.
(4) No vesting order referred to in this section shall have any
effect or operation in transferring or otherwise vesting land until
an appropriate entry or memorandum thereof is made by or with
the appropriate authority.
*NOTE--Previously "five hundred ringgit"see Companies (Amendment) Act 1986 [Act A657].
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Statement of company's affairs to be submitted to Official
Receiver
234. (1) There shall be made out and verified in the prescribed
form and manner and submitted to the Official Receiver or the
liquidator, as the case requires, a statement as to the affairs of the
company as at the date of the winding up order showing--
(a) the particulars of its assets, debts and liabilities;
(b) the names and addresses of its creditors;
(c) the securities held by them respectively;
(d) the dates when the securities were respectively given;
and
(e) such further information as is prescribed or as the Official
Receiver or the liquidator requires.
(2) The statement shall be submitted by one or more of the
persons who are at the date of the winding up order directors, and
by the secretary of the company, or by such of the persons hereinafter
mentioned as the Official Receiver or the liquidator, subject to the
direction of the Court, requires, that is to say, persons--
(a) who are or have been officers of the company;
(b) who have taken part in the formation of the company, at
any time within one year before the date of the winding
up order; or
(c) who are or have been within that period officers of or in
the employment of a corporation which is, or within that
period was, an officer of the company to which the statement
relates.
(3) The statement shall be submitted within fourteen days after
the date of the winding up order or within such extended time as
the Official Receiver or the liquidator or the Court for special
reasons specified, and the Official Receiver or the liquidator shall
within seven days after its receipt cause a copy of the statement
to be filed with the Court and lodged with the Registrar, and in
the case of a company which is an insurer, whether or not its
licence under the Insurance Act 1996 is revoked, Bank Negara
Malaysia, and where the Official Receiver is not the liquidator
shall cause a copy to be lodged with the Official Receiver.
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(4) Any person making or concurring in making the statement
required by this section may subject to the rules be allowed, and
be paid, out of the assets of the company, such costs and expenses
incurred in and about the preparation and making of the statement
as the Official Receiver or the liquidator considers reasonable
subject to an appeal to the Court.
(5) Every person who without reasonable excuse makes default
in complying with the requirements of this section shall be guilty
of an offence against this Act.
Penalty: Imprisonment for *three years or ten thousand ringgit
or both. Default penalty.
Report by liquidator
235. (1) The liquidator shall as soon as practicable after receipt
of the statement of affairs submit a preliminary report to the
Court--
(a) as to the amount of capital issued, subscribed and paid
up and the estimated amount of assets and liabilities;
(b) if the company has failed, as to the causes of the failure;
and
(c) whether in his opinion further inquiry is desirable as to
any matter relating to the promotion, formation or failure
of the company or the conduct of the business thereof.
(2) The liquidator may also, if he thinks fit, make further reports
stating the manner in which the company was formed and whether
in his opinion any fraud has been committed or any material fact
has been concealed by any person in its promotion or formation
or by any officer in relation to the company since its formation,
and whether any officer of the company has contravened or failed
to comply with this Act, and specifying any other matter which
in his opinion it is desirable to bring to the notice of the Court.
(3) The liquidator of a company which is an insurer shall submit
the preliminary report in subsection (1) and the further reports in
subsection (2) to Bank Negara Malaysia at the same time as he
submits them to the Court.
*NOTE--Previously "twelve months or two thousand five hundred ringgit"see Companies
(Amendment) Act 1986 [Act A657].
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Powers of liquidator
236. (1) The liquidator may with the authority either of the Court
or of the committee of inspection--
(a) carry on the business of the company so far as is necessary
for the beneficial winding up thereof, but the authority
shall not be necessary to so carry on the business during
the four weeks next after the date of the winding up
order;
(b) subject to section 292 pay any class of creditors in full;
(c) make any compromise or arrangement with creditors or
persons claiming to be creditors or having or alleging
themselves to have any claim, present or future, certain
or contingent, ascertained or sounding only in damages
against the company, or whereby the company may be
rendered liable;
(d) compromise any calls and liabilities to calls, debts and
liabilities capable of resulting in debts and any claims,
present or future, certain or contingent, ascertained or
sounding only in damages subsisting or supposed to subsist
between the company and a contributory or other debtor
or person apprehending liability to the company, and all
questions in any way relating to or affecting the assets
or the winding up of the company, on such terms as are
agreed, and take any security for the discharge of any
such call, debt, liability or claim, and give a complete
discharge in respect thereof; and
(e) appoint an advocate to assist him in his duties.
(2) The liquidator may--
(a) bring or defend any action or other legal proceeding in
the name and on behalf of the company;
(b) compromise any debt due to the company other than calls
and liabilities for calls and other than a debt where the
amount claimed by the company to be due to it exceeds
one thousand five hundred ringgit;
(c) sell the immovable and movable property and things in
action of the company by public auction, public tender
or private contract with power to transfer the whole thereof
to any person or company or to sell the same in parcels;
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(d) do all acts and execute in the name and on behalf of the
company all deeds, receipts and other documents and for
that purpose use when necessary the company's seal;
(e) prove rank and claim in the bankruptcy of any contributory
or debtor for any balance against his estate, and receive
dividends in the bankruptcy in respect of that balance as
a separate debt due from the bankrupt and rateably with
the other separate creditors;
(f) draw, accept, make and indorse any bill of exchange or
promissory note in the name and on behalf of the company
with the same effect with respect to the liability of the
company as if the bill or note had been drawn, accepted,
made or indorsed by or on behalf of the company in the
course of its business;
(g) raise on the security of the assets of the company any
money requisite;
(h) take out letters of administration of the estate of any
deceased contributory or debtor, and do any other act
necessary for obtaining payment of any money due from
a contributory or debtor or his estate which cannot be
conveniently done in the name of the company, and in
all such cases the money due shall for the purposes of
e n a b l i n g the liquidator to take out the letters of
administration or recover the money be deemed due to
the liquidator himself;
(i) appoint an agent to do any business which the liquidator
is unable to do himself; and
(j) do all such other things as are necessary for winding up
the affairs of the company and distributing its assets.
(3) The exercise by the liquidator of the powers conferred by
this section shall be subject to the control of the Court, and any
creditor or contributory may apply to the Court with respect to any
exercise or proposed exercise of any of those powers.
Exercise and control of liquidator's powers
237. (1) Subject to this Part the liquidator shall in the administration
of the assets of the company and in the distribution thereof among
its creditors have regard to any directions given by resolution of
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the creditors or contributories at any general meeting or by the
committee of inspection, and any directions so given by the creditors
or contributories shall in case of conflict override any directions
given by the committee of inspection.
(2) The liquidator may summon general meetings of the creditors
or contributories for the purpose of ascertaining their wishes, and
he shall summon meetings at such times as the creditors or
contributories by resolution direct or whenever requested in writing
to do so by not less than one-tenth in value of the creditors or
contributories.
(3) The liquidator may apply to the Court for directions in
relation to any particular matter arising under the winding up.
(4) Subject to this Part the liquidator shall use his own discretion
in the management of the affairs and property of the company and
the distribution of its assets.
Payment by liquidator into bank
238. (1) Every liquidator shall, in the manner and at the times
prescribed by the rules pay the money received by him into such
bank account as is prescribed by the rules or as is specified by the
Court.
(2) If any liquidator retains for more than ten days a sum exceeding
two hundred ringgit, or such other amount as the Court in any
particular case authorizes him to retain, then unless he explains the
retention to the satisfaction of the Court he shall pay interest on
the amount so retained in excess computed from the expiration of
the ten days until he has complied with subsection (1) at the rate
of twenty per centum per annum, and shall be liable--
(a) to disallowance of all or such part of his remuneration
as the Court thinks just;
(b) to be removed from his office by the Court; and
(c) to pay any expenses occasioned by reason of his default.
(3) Any liquidator who pays any sums received by him as liquidator
into any bank or account other than the bank or account prescribed
or specified under subsection (1) shall be guilty of an offence
against this Act.
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Release of liquidators and dissolution of company
When the liquidator--
239.
(a) has realized all the property of the company or so much
thereof as can in his opinion be realized without needlessly
protracting the liquidation, and has distributed a final
dividend, if any, to the creditors and adjusted the rights
of the contributories among themselves and made a final
return, if any, to the contributories; or
(b) has resigned or has been removed from his office,
he may apply to the Court--
(c) for an order that he be released; or
(d) for an order that he be released and that the company be
dissolved.
As to orders for release or dissolution
240. (1) Where an order is made that the company be dissolved,
the company shall from the date of the order be dissolved accordingly.
(2) The Court--
(a) may cause a report on the accounts of a liquidator (not
being the Official Receiver) to be prepared by the Official
Receiver or by some approved company auditor appointed
by the Court;
(b) on the liquidator complying with all the requirements of
the Court, shall take into consideration the report and any
objection which is urged by the Official Receiver, auditor
or any creditor or contributory or other person interested
against the release of the liquidator; and
(c) shall either grant or withhold the release accordingly.
(3) Where the release of a liquidator is withheld, the Court may,
on the application of any creditor or contributory or person interested,
make such order as it thinks just charging the liquidator with the
consequences of any act or default which he may have done or
made contrary to his duty.
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(4) An order of the Court releasing the liquidator shall discharge
him from all liability in respect of any act done or default made
by him in the administration of the affairs of the company or
otherwise in relation to his conduct as liquidator, but any such
order may be revoked on proof that it was obtained by fraud or
by suppression or concealment of any material fact.
(5) Where the liquidator has not previously resigned or been
removed his release shall operate as a removal from office.
(6) Where the Court has made--
(a) an order that the liquidator be released; or
(b) an order that the liquidator be released and that the company
be dissolved,
an office copy of the order shall within fourteen days after the
making thereof be lodged by the liquidator with the Registrar and
with the Official Receiver, and a liquidator who makes default in
complying with the requirements of this subsection shall be guilty
of an offence against this Act.
Penalty: *Two thousand ringgit. Default penalty.
Subdivision (3)--Committees of Inspection
Meetings to determine whether committee of inspection to be
appointed
241. (1) The liquidator may, and shall, if requested by any creditor
or contributory, summon separate meetings of the creditors and
contributories for the purpose of determining whether or not the
creditors or contributories require the appointment of a committee
of inspection to act with the liquidator, and if so who are to be
members of the committee.
(2) If there is a difference between the determinations of the
meetings of the creditors and contributories, the Court shall decide
the difference and make such order as it thinks fit.
*NOTE--Previously "five hundred ringgit"see Companies (Amendment) Act 1986 [Act A657].
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Constitution and proceedings of committee of inspection
242. (1) The committee of inspection shall consist of creditors
and contributories of the company or persons holding--
(a) general powers of attorney from creditors or contributories;
or
(b) s p e c i a l authorities from creditors or contributories
authorizing the persons named therein to act on such a
committee,
appointed by the meetings of creditors and contributories in such
proportions as are agreed or in case of difference as are determined
by the Court.
(2) The committee shall meet at such times and places as they
from time to time appoint, and the liquidator or any member of
the committee may also call a meeting of the committee as he
thinks necessary.
(3) The Committee may act by a majority of their members
present at a meeting, but shall not act unless a majority of the
committee is present.
(4) A member of the committee may resign by notice in writing
signed by him and delivered to the liquidator.
(5) If a member of the committee becomes bankrupt or assigns
his estate for the benefit of his creditors or makes an arrangement
with his creditors pursuant to any written law relating to bankruptcy
or is absent from five consecutive meetings of the committee
without the leave of those members who together with himself
represent the creditors or contributories, as the case may be, his
office shall thereupon become vacant.
(6) A member of the committee may be removed by an ordinary
resolution at a meeting of creditors, if he represents creditors, or
of contributories, if he represents contributories, of which meeting
seven days' notice has been given stating the object of the meeting.
(7) A vacancy in the committee may be filled by the appointment
by the committee of the same or another creditor or contributory
or person holding a general power or special authority as specified
in subsection (1).
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(8) The liquidator may, at any time of his own motion and shall,
within seven days after the request in writing of a creditor or
contributory, summon a meeting of creditors or of contributories,
as the case requires, to consider any appointment made pursuant
to subsection (7) and the meeting may confirm or revoke the
appointment and appoint another creditor or contributory or person
holding a general power or special authority as specified in subsection
(1), as the case requires, in his stead.
(9) The continuing members of the committee if not less than
two may act notwithstanding any vacancy in the committee.
Subdivision (4)--General Powers of Court
Power to stay winding up
243. (1) At any time after an order for winding up has been made
the Court may, on the application of the liquidator or of any
creditor or contributory and on proof to the satisfaction of the
Court that all proceedings in relation to the winding up ought to
be stayed, make an order staying the proceedings either altogether
or for a limited time on such terms and conditions as the Court
thinks fit.
(2) On any such application the Court may, before making an
order, require the liquidator to furnish a report with respect to any
facts or matters which are in his opinion relevant.
(3) An office copy of every order made under this section shall
be lodged by the company with the Registrar and with the Official
Receiver within fourteen days after the making of the order.
Penalty: *One thousand ringgit. Default penalty.
Settlement of list of contributories and application of assets
244. (1) As soon as may be after making a winding up order the
Court shall settle a list of contributories and may rectify the register
of members in all cases where rectification is required in pursuance
of this Part and shall cause the assets of the company to be collected
and applied in discharge of its liabilities.
*NOTE--Previously "two hundred and fifty ringgit"see Companies (Amendment) Act 1986
[Act A657].
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(2) Notwithstanding subsection (1) where it appears to the Court
that it will not be necessary to make calls on or adjust the rights
of contributories, the Court may dispense with the settlement of
a list of contributories.
(3) In settling the list of contributories the Court shall distinguish
between persons who are contributories in their own right and
persons who are contributories as being representatives of or liable
for the debts of others.
(4) The list of contributories when settled shall be prima facie
evidence of the liabilities of the persons named therein as
contributories.
Payment of debts due by contributory to company and extent
to which set-off allowed
245. (1) The Court may make an order directing any contributory
for the time being on the list of contributories to pay to the company
in the manner directed by the order any money due from him or
from the estate of the person whom he represents exclusive of any
money payable by him or the estate by virtue of any call in
pursuance of this Act, and may--
(a) in the case of an unlimited company, allow to the
contributory by way of set-off any money due to him or
to the estate which he represents from the company on
any independent dealing or contract but not any money
due to him as a member of the company in respect of any
dividend or profit; and
(b) in the case of a limited company, make to any director
whose liability is unlimited or to his estate the like
allowance,
and in the case of any company whether limited or unlimited,
when all the creditors are paid in full, any money due on any
a c c o u n t whatever to a contributory from the company may
be allowed to him by way of set-off against any subsequent
call.
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Power of Court to make calls
(2) The Court may either before or after it has ascertained the
sufficiency of the assets of the company--
(a) make calls on all or any of the contributories for the time
being on the list of contributories, to the extent of their
liability, for payment of any money which the Court
considers necessary to satisfy the debts and liabilities of
the company and the costs, charges and expenses of winding
up and for the adjustment of the rights of the contributories
among themselves; and
(b) make an order for payment of any calls so made,
and in making a call may take into consideration the probability
that some of the contributories may partly or wholly fail to pay
the call.
Payment into bank of moneys due to company
(3) The Court may order any contributory, purchaser or other
person from whom money is due to the company to pay the amount
due into some bank named in the order to the account of the
liquidator instead of to the liquidator, and any such order may be
enforced in the same manner as if it had directed payment to the
liquidator.
(4) All moneys and securities paid or delivered into any bank
pursuant to this Division shall be subject in all respects to orders
of the Court.
Order on contributory conclusive evidence
(5) An order made by the Court under this section shall, subject
to any right of appeal, be conclusive evidence that the money, if
any, thereby appearing to be due or ordered to be paid is due, and
all other pertinent matters stated in the order shall be taken to be
truly stated as against all persons and in all proceedings.
Appointment of special manager
246. (1) The liquidator may, if satisfied that the nature of the
estate or business of the company, or the interests of the creditors
or contributories generally, require the appointment of a special
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manager of the estate or business of the company other than himself,
apply to the Court which may appoint a special manager of the
estate or business to act during such time as the Court directs with
such powers, including any of the powers of a receiver or manager,
as are entrusted to him by the Court.
(2) The special manager--
(a) shall give such security and account in such manner as
the Court directs;
(b) shall receive such remuneration as is fixed by the Court;
and
(c) m a y at any time resign after giving not less than
one month's notice in writing to the liquidator of his
intention to resign, or on cause shown be removed by
the Court.
Claims of creditors and distribution of assets
247. (1) The Court may fix a date on or before which creditors
are to prove their debts or claims or after which they will be
excluded from the benefit of any distribution made before those
debts are proved.
(2) The Court shall adjust the rights of the contributories among
themselves and distribute any surplus among the persons entitled
thereto.
(3) The Court may, in the event of the assets being insufficient
to satisfy the liabilities, make an order as to the payment out of
the assets of the costs charges and expenses incurred in the winding
up in such order of priority as the Court thinks fit.
Inspection of books by creditors and contributories
248. The Court may make such order for inspection of the books
and papers of the company by creditors and contributories as the
Court thinks just, and any books and papers in the possession of
the company may be inspected by creditors or contributories
accordingly, but not further or otherwise.
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Power to summon persons connected with company
249. (1) The Court may summon before it any officer of the
company or person known or suspected to have in his possession
any property of the company or supposed to be indebted to the
company, or any person whom the Court deems capable of giving
information concerning the promotion, formation, trade dealings,
affairs or property of the company.
(2) The Court may examine him on oath concerning the matters
mentioned in subsection (1) either by word of mouth or on written
interrogatories and may reduce his answers to writing and require
him to sign them, and any writing so signed may be used in
evidence in any legal proceedings against him.
(3) The Court may require him to produce any books and papers
in his custody or power relating to the company, but where he
claims any lien on books or papers the production shall be without
prejudice to that lien, and the Court shall have jurisdiction to
determine all question relating to that lien.
(4) An examination under this section or section 250 may, if the
Court so directs and subject to the rules, be held before any Sessions
Court Judge named for the purpose by the Court, and the powers
of the Court under this section and section 250 may be exercised
by such Sessions Court Judge.
(5) If any person so summoned after being tendered a reasonable
sum for his expenses refuses to come before the Court at the time
appointed not having a lawful excuse, made known to the Court
at the time of its sitting and allowed by it, the Court may cause
him to be apprehended and brought before the Court for examination.
Power to order public examination of promoters, directors,
etc.
250. (1) Where the liquidator has made a report under this Part
stating that, in his opinion, a fraud has been committed or that any
material fact has been concealed by any person in the promotion
or formation of the company or by any officer in relation to the
company since its formation or that any officer of the company
has failed to act honestly or diligently or has been guilty of any
impropriety or recklessness in relation to the affairs of the company
the Court may after consideration of the report direct that the
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person or officer, or any other person who was previously an
officer of the company, including any banker, advocate or auditor,
or who is known or suspected to have in his possession any property
of the company or is supposed to be indebted to the company or
any person whom the Court deems capable of giving information
concerning the promotion, formation, trade dealings, affairs or
property of the company, shall attend before the Court on a day
appointed and be publicly examined as to the promotion or formation
or the conduct of the business of the company, or in the case of
an officer or former officer as to his conduct and dealings as an
officer thereof.
(2) The liquidator and any creditor or contributory may take
part in the examination either personally or by an advocate.
(3) The Court may put or allow to be put such questions to the
person examined as the Court thinks fit.
(4) The person examined shall be examined on oath and shall
answer all such questions as the Court puts or allows to be put to
him.
(5) A person ordered to be examined under this section shall
before his examination be furnished with a copy of the liquidator's
report.
(6) Where a person directed to attend before the Court under
subsection (1) applies to the Court to be exculpated from any
charges made or suggested against him the liquidator shall appear
on the hearing of the application and call the attention of the Court
to any matters which appear to him to be relevant and if the Court,
after hearing any evidence given or witnesses called by the liquidator,
grants the application the Court may allow the applicant such costs
as in its discretion it thinks fit.
(7) Notes of the examination--
(a) shall be reduced to writing;
(b) shall be read over to or by and signed by the person
examined;
(c) may thereafter be used in evidence in any legal proceedings
against him; and
(d) shall be open to the inspection of any creditor or
contributory at all reasonable times.
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(8) The Court may if it thinks fit adjourn the examination from
time to time.
Power to arrest absconding contributory
251.  The Court, at any time before or after making a winding up
order, on proof of probable cause for believing that a contributory,
director or former director of the company is in hiding or had
absconded or is about to quit Malaysia or otherwise to abscond or
to remove or conceal any of his property for the purpose of evading
payment of calls or of avoiding examination respecting the affairs
of the company, or otherwise avoiding, delaying or embarrassing
proceedings in the winding up, may cause the contributory, director
or former director to be arrested and his books and papers and
movable personal property to be seized and him and them to be
safely kept until such time as the Court orders.
Delegation to liquidator of certain powers of Court
252.  Provision may be made by rules enabling or requiring all
or any of the powers and duties conferred and imposed on the
Court by this Part in respect of--
(a) the holding and conducting of meetings to ascertain the
wishes of creditors and contributories;
(b) the settling of lists of contributories, the rectifying of the
register of members where required, and the collecting
and applying of the assets;
(c) the paying, delivery, conveyance, surrender or transfer
of money, property, books or papers to the liquidator;
(d) the making of calls and the adjusting of the rights of
contributories; and
(e) the fixing of a time within which debts and claims must
be proved,
to be exercised or performed by the liquidator as an officer of the
Court and subject to the control of the Court, but the liquidator
shall not without the special leave of the Court rectify the register
of members and shall not make any call without either the special
leave of the Court or the sanction of the committee of inspection.
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Powers of Court cumulative
253. (1) Any powers by this Act conferred on the Court shall be
in addition to and not in restriction of any existing powers of
instituting proceedings against any contributory or debtor of the
company or the estate of any contributory or debtor for the recovery
of any call or other sums.
(2) Subject to the rules an appeal from any order or decision
made or given in the winding up of a company shall lie in the same
manner and subject to the same conditions as an appeal from any
order or decision of the Court in cases within its ordinary jurisdiction.
DIVISION 3
VOLUNTARY WINDING UP
Subdivision (1)--Introductory
Circumstances in which company may be wound up voluntarily
254. (1) A company may be wound up voluntarily--
(a) when the period, if any, fixed for the duration of the
company by the memorandum or articles expires, or the
event, if any, occurs, on the occurrence of which the
memorandum or articles provide that the company is to
be dissolved and the company in general meeting has
passed a resolution requiring the company to be wound
up voluntarily; or
(b) if the company so resolves by special resolution.
(2) A company shall--
(a) within seven days after the passing of a resolution for
voluntarily winding up lodge a printed copy of the resolution
with the Registrar; and
(b) within ten days after the passing of the resolution give
notice of the resolution in a newspaper circulating generally
throughout Malaysia.
(3) If the company fails to comply with subsection (2) 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 1986
[Act A657].
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(4) A company which is an insurer, whether or not its licence
under the Insurance Act 1996 is revoked, shall not be wound up
voluntarily before the transfer of the whole of its insurance business
to another insurer under section 128 of that Act.
Provisional liquidators
255. (1) Where the directors of a company have made a statutory
declaration in the prescribed form which has been lodged with the
Registrar and with the Official Receiver--
(a) that the company cannot by reason of its liabilities continue
its business; and
(b) that meetings of the company and of its creditors have
been summoned for a date within one month of the date
of the declaration,
the directors shall forthwith appoint an approved liquidator to be
the provisional liquidator.
(2) A provisional liquidator shall have and may exercise all the
functions and powers of a liquidator in a creditors' winding up
subject to such limitations and restrictions as may be prescribed
by the rules.
(3) The appointment of a provisional liquidator under this section
shall continue for one month from the date of his appointment or
for such further period as the Official Receiver may allow in any
particular case or until the appointment of a liquidator (whichever
first occurs).
(4) Notice of the appointment of a provisional liquidator under
this section together with a copy of the declaration lodged with
the Registrar shall be advertised within fourteen days of the
appointment of the provisional liquidator in some newspaper
circulating generally throughout Malaysia.
(5) A provisional liquidator shall be entitled to receive such
salary or remuneration by way of percentage or otherwise as is
prescribed.
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Date of commencement of winding up
(6) A voluntary winding up shall commence--
(a) where a provisional liquidator has been appointed before
the resolution for voluntary winding up was passed, at
the time when the declaration referred to in subsection
(1) was lodged with the Registrar; and
(b) in any other case, at the time of the passing of the resolution
for voluntary winding up.
Effect of voluntary winding up
256. (1) The company shall from the commencement of the winding
up cease to carry on its business, except so far as is in the opinion
of the liquidator required for the beneficial winding up thereof, but
the corporate state and corporate powers of the company shall
notwithstanding anything to the contrary in its articles, continue
until it is dissolved.
(2) Any transfer of shares, not being a transfer made to or with
the sanction of the liquidator, and any alteration in the status of
the members made after the commencement of the winding up,
shall be void.
Declaration of solvency
257. (1) Where it is proposed to wind up a company voluntarily
the directors of the company, or in the case of a company having
more than two directors, the majority of the directors may, before
the date on which the notices of the meeting at which the resolution
for the winding up of the company is to be proposed are sent out,
make a written declaration to the effect that they have made an
inquiry into the affairs of the company, and that at a meeting of
directors have formed the opinion that the company will be able
to pay its debts in full within a period not exceeding twelve months
after the commencement of the winding up.
(2) There shall be attached to the declaration a statement of
affairs of the company showing, in the prescribed form--
(a) the assets of the company, and the total amount expected
to be realized therefrom;
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(b) the liabilities of the company; and
(c) the estimated expenses of winding up,
made up to the latest practicable date before the making of the
declaration.
(3) A declaration so made shall have no effect for the purposes
of this Act unless it is--
(a) made at the meeting of directors referred to in subsection
(1);
(b) made within five weeks immediately preceding the passing
of the resolution for voluntary winding up; and
(c) lodged with the Registrar before the date on which the
notices of the meeting at which the resolution for the
winding up of the company is to be proposed are sent
out.
(4) A director who makes a declaration under this section without
having reasonable grounds for the opinion that the company will
be able to pay its debts in full within the period stated in the
declaration shall be guilty of an offence against this Act.
Penalty: Imprisonment for *three years or ten thousand ringgit
or both.
(5) If the company is wound up in pursuance of a resolution for
voluntary winding up passed within a period of five weeks after
the making of the declaration, but its debts are not paid or provided
for in full within the period stated in the declaration, it shall be
presumed until the contrary is shown that the director did not have
reasonable grounds for his opinion.
Subdivision (2)--Provisions applicable only to
Members' Voluntary Winding Up
Liquidators
258. (1) The company in general meeting shall appoint one or
more liquidators for the purpose of winding up the affairs and
distributing the assets of the company and may fix the remuneration
to be paid to him or them.
*NOTE--Previously "twelve months or two thousand five hundred ringgit"see Companies
(Amendment) Act 1986 [Act A657].
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(2) On the appointment of a liquidator all the powers of the
directors shall cease except so far as the liquidator or the company
in general meeting with the consent of the liquidator approves the
continuance thereof.
(3) The company may, in general meeting convened by any
contributory by special resolution of which special notice has been
given to the creditors and the liquidators, remove any liquidator
but no such resolution shall be effective to remove a liquidator if
the Court on the application of the liquidator or a creditor has
ordered that the liquidator be not removed.
(4) If a vacancy occurs by death, resignation, removal or otherwise
in the office of a liquidator, the company in general meeting may
fill the vacancy by the appointment of a liquidator and fix the
remuneration to be paid to him, and for that purpose a general
meeting may be convened by any contributory, or if there were
more liquidators than one by the continuing liquidators.
(5) The meeting shall be held in manner provided by this Act
or by the articles or in such manner as is on application by any
contributory or by the continuing liquidators determined by the
Court.
Duty of liquidator to call creditors' meeting in case of insolvency
259. (1) If the liquidator is at any time of the opinion that the
company will not be able to pay or provide for the payment of its
debts in full within the period stated in the declaration made under
section 257, he shall forthwith summon a meeting of the creditors
and lay before the meeting a statement of the assets and liabilities
of the company and the notice summoning the meeting shall draw
the attention of the creditors to the right conferred upon them by
subsection (2).
(2) The creditors may, at the meeting summoned under subsection
(1), appoint some other person to be liquidator for the purpose of
winding up the affairs and distributing the assets of the company
instead of the liquidator appointed by the company.
(3) If the creditors appoint some other person under subsection
(2) the winding up shall thereafter proceed as if the winding up
were a creditor's voluntary winding up.
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(4) Within seven days after a meeting has been held pursuant
to subsection (1) the liquidator or if some other person has been
appointed by the creditors to be the liquidator the person so appointed
shall lodge with the Registrar and with the Official Receiver a
notice in the prescribed form and if default is made in complying
with this subsection the liquidator or the person so appointed (as
the case requires) shall be guilty of an offence against this Act.
Penalty: *One thousand ringgit. Default penalty.
Alternative provisions as to annual meetings in case of insolvency
(5) Where the liquidator has convened a meeting under subsection
(1) and the creditors do not appoint a liquidator instead of the
liquidator appointed by the company the winding up shall thereafter
proceed as if the winding up were a creditors' voluntary winding
up; but the liquidator shall not be required to summon an annual
m e e t i n g of creditors at the end of the first year from the
commencement of the winding up if the meeting held under subsection
(1) was held less than three months before the end of that year.
Subdivision (3)--Provisions applicable only to
Creditors' Voluntary Winding Up
Meeting of creditors
260. (1) The company shall cause a meeting of the creditors of
the company to be summoned for the day, or the day next following
the day, on which there is to be held the meeting at which the
resolution for voluntary winding up is to be proposed, and shall
cause the notices of the meeting of creditors to be sent by post to
the creditors simultaneously with the sending of the notices of the
meeting of the company.
(2) The company shall convene the meeting at a time and place
convenient to the majority in value of the creditors and shall--
(a) give to the creditors at least seven clear days' notice by
post of the meeting; and
(b) send to each creditor with the notice a statement showing
the names of all creditors and the amounts of their claims.
*NOTE--Previously "two hundred ringgit"see Companies (Amendment) Act 1986 [Act A657].
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(3) The company shall cause notice of the meeting of the creditors
to be advertised at least seven days before the date of the meeting
in a newspaper circulating generally throughout Malaysia.
(4) The directors of the company shall--
(a) cause a full statement of the company's affairs showing
in respect of assets the method and manner in which the
valuation of the assets was arrived at, together with a list
of the creditors and the estimated amount of their claims
to be laid before the meeting of creditors; and
(b) appoint one of their number to attend the meeting.
(5) The director so appointed and the secretary shall attend the
meeting and disclose to the meeting the company's affairs and the
circumstances leading up to the proposed winding up.
(6) The creditors may appoint one of their number or the director
appointed under subsection (4) to preside at the meeting.
(7) The chairman shall at the meeting determine whether the
meeting has been held at a time and place convenient to the majority
in value of the creditors and his decision shall be final.
(8) If the chairman decides that the meeting has not been held
at a time and place convenient to that majority the meeting shall
lapse and a further meeting shall be summoned by the company
as soon as is practicable.
(9) If the meeting of the company is adjourned and the resolution
for winding up is passed at an adjourned meeting, any resolution
passed at the meeting of the creditors shall have effect as if it had
been passed immediately after the passing of the resolution for
winding up.
(10) If default is made in complying with this section the company
and any officer of the company who is in default shall be guilty
of an offence against this Act.
Penalty: *Two thousand ringgit.
*NOTE--Previously "five hundred ringgit"see Companies (Amendment) Act 1986 [Act A657].
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Liquidators
261. (1) The company shall and the creditors may at their respective
meetings nominate a person to be liquidator for the purpose of
winding up the affairs and distributing the assets of the company,
and if the creditors and the company nominate different persons
the person nominated by the creditors shall be liquidator, and if
no person is nominated by the creditors the person nominated by
the company shall be liquidator.
(2) Notwithstanding subsection (1) where different persons are
nominated any director, member or creditor may, within seven
days after the date on which the nomination was made by the
creditors, apply to the Court for an order directing that the person
nominated as liquidator by the company shall be liquidator instead
of or jointly with the person nominated by the creditors.
(3) The committee of inspection, or if there is no such committee
the creditors, may fix the remuneration to be paid to the liquidator.
(4) On the appointment of a liquidator all the powers of the
directors shall cease, except so far as the committee of inspection,
or if there is no such committee the creditors, approve the continuance
thereof.
(5) If a liquidator, other than a liquidator appointed by or by
the direction of the Court dies, resigns or otherwise vacates the
office the creditors may fill the vacancy and for the purpose of so
doing a meeting of the creditors may be summoned by any two
of their number.
Committee of inspection
262. (1) The creditors at the meeting summoned pursuant to section
259 or 260 or at any subsequent meeting may, if they think fit,
appoint a committee of inspection consisting of not more than five
persons, whether creditors or not and if such a committee is appointed
the company may, either at the meeting at which the resolution for
voluntary winding up is passed or at any time subsequently in
general meeting, appoint such number of persons but not more
than five as it thinks fit to act as members of the committee.