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Power of Court in relation to certain irredeemable debentures
77. (1) Notwithstanding anything in any debenture or trust deed
the security for any debentures which are irredeemable or redeemable
only on the happening of a contingency shall, if the Court so
orders, be enforceable, forthwith or at such other time as the Court
directs if on the application of the trustee for the holders of the
debentures or (where there is no trustee) on the application of the
holder of any of the debentures the Court is satisfied that--
(a) at the time of the issue of the debentures the assets of
the corporation which constituted or were intended to
constitute the security therefor were sufficient or likely
to become sufficient to discharge the principal debt and
any interest thereon;
(b) the security, if realized under the circumstances existing
at the time of the application, would be likely to bring
not more than sixty per centum of the principal sum of
moneys outstanding (regard being had to all prior charges
and charges ranking pari passu, if any); and
(c) the assets covered by the security, on a fair valuation on
the basis of a going concern after allowing a reasonable
amount for depreciation are worth less than the principal
sum and the borrowing corporation is not making sufficient
profit to pay the interest due on the principal sum or
(where no definite rate of interest is payable) interest
thereon at such rate as the Court considers would be a
fair rate to expect from a similar investment.
(2) Subsection (1) shall not affect any power to vary rights or
accept any compromise or arrangement created by the terms of the
debentures or the relevant trust deed or under a compromise or
arrangement between the borrowing corporation and creditors.
Duties of trustees
78. (1) A trustee for the holders of debentures--
(a) shall exercise reasonable diligence to ascertain whether
or not the assets of the borrowing corporation and of
each of its guarantor corporations which are or may be
available whether by way of security or otherwise are
sufficient or are likely to be or become sufficient to
discharge the principal debt as and when it becomes due;
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(b) shall satisfy itself that each prospectus relating to the
debentures does not contain any matter which is inconsistent
with the terms of the debentures or with the relevant trust
deed;
(c) shall ensure that the borrowing corporation complies with
Division 7 so far as it relates to the debentures and is
applicable;
(d) shall exercise reasonable diligence to ascertain whether
or not the borrowing corporation and each of its guarantor
corporations have committed any breach of the covenants,
terms and provisions of the debentures or the trust deed;
(e) except where it is satisfied that the breach will not materially
prejudice the security, if any, for the debentures or the
interests of the holders of the debentures, shall take all
steps and do all such things as it is empowered to do to
cause the borrowing corporation and any of its guarantor
corporations to remedy any breach of those covenants,
terms and provisions;
(f) where the borrowing corporation or any of its guarantor
corporations fails when so required by the trustee to
remedy any breach of the covenants, terms and provisions
of the debentures or the trust deed, may place the matter
before a meeting of holders of the debentures, submit
such proposals for the protection of their investment as
the trustee considers necessary or appropriate and obtain
the directions of the holders in relation thereto; and
(g) where the borrowing corporation submits to those holders
a compromise or arrangement, shall give to them a statement
explaining the effect of the compromise or arrangement
and, if it thinks fit, recommend to them an appropriate
course of action to be taken by them in relation thereto.
(2) Where, after due inquiry, the trustee for the holders of the
debentures at any time is of the opinion that the assets of the
borrowing corporation and of any of its guarantor corporations
which are or should be available whether by way of security or
otherwise, are insufficient, or likely to become insufficient, to
discharge the principal debt as and when it becomes due, the
trustee may apply to the Minister for an order under this subsection
and the Minister may, on such application, after giving the borrowing
corporation an opportunity of making representations in relation
to that application, by order in writing served on the corporation
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at its registered office in Malaysia, impose such restrictions on the
activities of the corporation, including restrictions on advertising
for deposits or loans and on borrowing by the corporation as the
Minister thinks necessary for the protection of the interests of the
holders of the debentures or the Minister may, and if the borrowing
corporation so requires, shall, direct the trustee to apply to the
Court for an order under subsection (4) and the trustee shall apply
accordingly.
(3) Where--
(a) after due inquiry, the trustee at any time is of the opinion
that the assets of the borrowing corporation and of any
of its guarantor corporations which are or should be
available, whether by way of security or otherwise, are
insufficient or likely to become insufficient, to discharge
the principal debt as and when it becomes due; or
(b) the corporation has contravened or failed to comply with
an order made by the Minister under subsection (2),
the trustee may, and where the borrowing corporation has requested
the trustee to do so, the trustee shall apply to the Court for an order
under subsection (4).
(4) Where an application is made to the Court under subsection
(2) or (3), the Court may, after giving the borrowing corporation
an opportunity of being heard, by order, do all or any of the
following things, namely:
(a) direct the trustee to convene a meeting of the holders of
the debentures for the purpose of placing before them
such information relating to their interests and such
proposals for the protection of their interests as the trustee
considers necessary or appropriate, and of obtaining their
directions in relation thereto and give such directions in
relation to the conduct of the meeting as the Court thinks
fit;
(b) stay all or any actions or proceedings before any court
by or against the borrowing corporation;
(c) restrain the payment of any moneys by the borrowing
corporation to the holders of debentures of the corporation
or to any class of such holders;
(d) appoint a receiver of such of the property as constitutes
the security, if any, for the debentures; and
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(e) give such further directions from time to time as may be
necessary to protect the interests of the holders of the
debentures, the members of the borrowing corporation or
any of its guarantor corporations or the public,
but in making any such order the Court shall have regard to the
rights of all creditors of the borrowing corporation.
(5) The Court may vary or rescind any order made under subsection
(4) as the Court thinks fit.
(6) A trustee in making any application to the Minister or to the
Court shall have regard to the nature and kind of the security given
when the debentures were offered to the public, and if no security
was given shall have regard to the position of the holders of the
debentures as unsecured creditors of the borrowing corporation.
(7) A trustee may rely upon any certificate or report given or
statement made by any advocate, auditor or officer of the borrowing
corporation or guarantor corporation if it has reasonable grounds
for believing that such advocate, auditor or officer was competent
to give or make the certificate, report or statement.
Powers of trustee to apply to the Court for directions, etc.
79. (1) The trustee for the holder of debentures may apply to the
Court--
(a) for directions in relation to any matter arising in connection
with the performance of the functions of the trustee; or
(b) to determine any question in relation to the interests of
the holders of debentures,
and the Court may--
(c) give such directions to the trustee as the Court deems fit;
and
(d) if satisfied that the determination of the question will be
just and beneficial accede wholly or partially to any such
application on such terms and conditions as the Court
thinks fit or make such other order on the application as
the Court thinks just.
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(2) The Court may on an application under this section order
a meeting of all or any of the holders of debentures to be called
to consider any matters in which they are concerned and to advise
the trustee thereon and may give such ancillary or consequential
directions as the Court thinks fit.
(3) The meeting shall be held and conducted in such manner as
the Court directs, under the chairmanship of a person nominated
by the trustee or such other person as the meeting appoints.
Obligations of borrowing corporation
80. (1) Where there is a trustee for the holders of any debentures
of a borrowing corporation the directors of the borrowing corporation
shall--
(a) at the end of a period not exceeding three months ending
on a day (not later than six months after commencement
of this Act or after the date of the relevant prospectus,
whichever is the later) which the trustee is required to
notify to the borrowing corporation in writing; and
(b) at the end of each succeeding period thereafter, being a
period of three months or such shorter time as the trustee
may, in any special circumstances, allow,
prepare a report that relates to that period and complies with the
requirements of subsection (2) and within one month after the end
of each such period lodge a copy of the report relating to that
period with the Registrar and with the trustee.
Penalty: *Ten thousand ringgit.
Default penalty: Two hundred and fifty ringgit.
(2) The report referred to in subsection (1) shall be signed by
not less than two of the directors on behalf of all of them and shall
set out in detail any matters adversely affecting the security or the
interests of the holders of the debentures and, without affecting the
generality of the foregoing, shall state.
(a) whether or not the limitations on the amount that the
corporation may borrow have been exceeded;
*NOTE--Previously "one thousand ringgit"see Companies (Amendment) Act 1986 [Act A657].
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(b) whether or not the borrowing corporation and each of its
guarantor corporations have observed and performed all
t h e covenants and provisions binding upon them
respectively by or pursuant to the debentures or any trust
deed;
(c) whether or not any event has happened which has caused
or could cause the debentures or any provision of the
relevant trust deed to become enforceable and if so,
particulars of that event;
(d) whether or not any circumstances affecting the borrowing
corporation, its subsidiaries or its guarantor corporations
or any of them have occurred which materially affect any
security or charge included in or created by the debentures
o r any trust deed and if so, particulars of those
circumstances;
(e) whether or not there has been any substantial change in
the nature of the business of the borrowing corporation
or any of its subsidiaries or any of its guarantor corporations
since the debentures were first issued to the public which
has not previously been reported upon as required by this
section and if so, particulars of that change; and
(f) where the borrowing corporation has deposited money
with or lent money to or assumed any liability of a
corporation which pursuant to section 6 is deemed to be
related to the borrowing corporation, particulars of--
(i) the total amounts so deposited or loaned and the
extent of any liability so assumed during the period
covered by the report; and
(ii) t h e total amounts owing to the borrowing
corporation in respect of money so deposited or
loaned and the extent of any liability so assumed
as at the end of the period covered by the report,
distinguishing between deposits, loans and assumptions
of liabilities which are secured and those which are
unsecured, but not including any deposit with or loan to
or any liability assumed on behalf of a corporation if that
corporation has guaranteed the repayment of the debentures
of the borrowing corporation and has secured the guarantee
by a charge over its assets in favour of the trustee for the
holders of the debentures of the borrowing corporation.
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(3) Where there is a trustee for the holders of any debentures
issued by a borrowing corporation, the borrowing corporation and
each of its guarantor corporations which has guaranteed the repayment
of the moneys raised by the issue of those debentures shall (within
twenty-one days after the creation of the charge) in writing furnish
the trustee for the holders of the debentures, whether or not any
demand therefor has been made, with particulars of any charge
created by the corporation or the guarantor corporation, as the case
requires, and when the amount to be advanced on the security of
the charge is indeterminate (within seven days after the advance)
with particulars of the amount in fact advanced but where any such
advances are merged in a current account with bankers or trade
creditors it shall be sufficient for particulars of the net amount
outstanding in respect of any such advances to be furnished every
three months.
(4) The directors of every borrowing corporation and of every
guarantor corporation shall at some date not later than nine months
after the expiration of each financial year of the corporation cause
to be made out and lodged with the Registrar and with the trustee
for the holders of the debentures, if any, a profit and loss account
for the period from the end of that financial year until the expiration
of six months after the end of that financial year and a balance
sheet as at the end of the period to which the profit and loss
account relates.
Penalty: *One thousand ringgit. Default penalty.
(5) Subsection 169(4) to (13) and subsection 174(1), (2) and (4)
shall with such adaptations as are necessary be applicable to every
profit and loss account and balance sheet made out and lodged
pursuant to subsection (4) as if that profit and loss account and
balance sheet were a profit and loss account and balance sheet
referred to in those subsections.
(6) Where the directors of a borrowing corporation do not lodge
with the trustee for the holders of debentures a report as required
by subsection (1) or where the directors of a borrowing corporation
or the directors of a guarantor corporation do not lodge with the
trustee the balance sheet, profit and loss accounts and reports as
required by subsection (4) within the time prescribed the trustee
shall forthwith lodge notice of that fact with the Registrar.
*NOTE--Previously "two hundred and fifty ringgit"see Companies (Amendment) Act 1986 [Act A657].
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Obligation of guarantor corporation to furnish information
81. (1) For the purpose of the preparation of a report that, by this
Act, is required to be signed by or on behalf of the directors of
a borrowing corporation or any of them, that corporation may, by
notice in writing require any of its guarantor corporations to furnish
it with any information relating to that guarantor corporation which
is, by this Act, required to be contained in that report, and that
guarantor corporation shall furnish the borrowing corporation with
that information before such date, being a date not earlier than
fourteen days after the notice is given, as may be specified in that
behalf in the notice.
(2) A corporation which fails to comply with a requirement
contained in a notice given pursuant to subsection (1) and every
officer of that corporation who is in default shall be guilty of an
offence against this Act.
Penalty: *Ten thousand ringgit. Default penalty.
Loans and deposits to be immediately repayable on certain
events
82. (1) Where in any prospectus issued in connection with an
invitation to the public to subscribe for or to purchase debentures
of a corporation, there is a statement as to any particular purpose
or project for which the moneys received by the corporation in
response to the invitation are to be applied, the corporation shall
from time to time make reports to the trustee for the holders of
those debentures as to the progress that has been made towards
achieving that purpose or completing that project.
(2) Each such report shall be included in the report required to
be furnished to the trustee for the holders of the debentures under
subsection 80(1).
(3) When it appears to the trustee for the holders of the debentures
that the purpose or project has not been achieved or completed
within the time stated in the prospectus within which the purpose
or project is to be achieved or completed or, where no such time
was stated, within a reasonable time, the trustee may and, if in his
opinion it is necessary for the protection of the interests of the
holders of the debentures, shall give notice in writing to the
corporation requiring it to repay the moneys so received by the
corporation and within one month after the notice is given, lodge
with the Registrar a copy thereof.
*NOTE--Previously "two hundred and fifty ringgit"see Companies (Amendment) Act 1986 [Act A657].
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(4) The trustee shall not give a notice pursuant to subsection (3)
if it is satisfied--
(a) that the purpose or project has been substantially achieved
or completed;
(b) that the interests of the holders of debentures have not
been materially prejudiced by the failure to achieve or
complete the purpose or project within the time stated in
the prospectus or within a reasonable time; or
(c) that the failure to achieve the purpose or project was due
to circumstances beyond the control of the corporation
that could not reasonably have been foreseen by the
corporation at the time that the prospectus was issued.
(5) Upon receipt by the corporation of a notice referred to in
subsection (3), the corporation shall be liable to repay, and on
demand in writing by him shall immediately repay, to any person
entitled thereto, any money owing to him as the result of a loan
or deposit made in response to the invitation unless--
(a) before the moneys were accepted by the corporation the
corporation had given notice in writing to the persons
from whom the moneys were received specifying the
purpose or project for which the moneys would in fact
be used and the moneys were accepted by the corporation
accordingly; or
(b) the corporation by notice in writing served on the holders
of the debentures--
(i) had specified the purpose or project for which the
moneys would in fact be applied by the corporation;
and
(ii) had offered to repay the moneys to the holders of
the debentures, and that person had not within
fourteen days after the receipt of the notice, or
such longer time as was specified in the notice,
in writing demanded from the corporation repayment
of the money.
(6) Where the corporation has given a notice in writing as
provided in subsection (5), specifying the purpose or project for
which the moneys will in fact be applied by the corporation, this
section shall apply and have effect as if the purpose or project so
specified in the notice was the particular purpose or project specified
in the prospectus as the purpose or project for which the moneys
were to be applied.
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Liability of trustees for debenture holders
83. (1) Subject to this section, any provision contained in a trust
deed relating to or securing an issue of debentures, or in any
contract with the holders of debentures secured by a trust deed,
shall be void so far as it would have the effect of exempting a
trustee thereof from or indemnifying it against liability for breach
of trust where it fails to show the degree of care and diligence
required of it as trustee.
(2) Subsection (1) shall not invalidate--
(a) any release otherwise validly given in respect of anything
done or omitted to be done by a trustee before the giving
of the release; or
(b) any provision enabling such a release to be given--
(i) on the agreement thereto of a majority of not less
than three-fourths in nominal value of the debenture
holders present and voting in person or, where
proxies are permitted, by proxy at a meeting
summoned for the purpose; and
(ii) either with respect to specific acts or omissions or
on the dissolution of the trustee or on its ceasing
to act.
(3) Subsection (1) shall not operate--
(a) to invalidate any provision in force at the commencement
of this Act so long as any trustee then entitled to the
benefit of that provision remains a trustee of the deed in
question; or
(b) to deprive any trustee of any exemption or right to be
indemnified in respect of anything done or omitted to be
done by the trustee while any such provision was in
force.
DIVISION 5
INTERESTS OTHER THAN SHARES, DEBENTURES, ETC.
Interpretation
84. (1) In this Division and in the Seventh Schedule, unless
inconsistent with the context or subject matter--
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"company" means a public company, and includes a corporation
that is a public company under the law of a proclaimed country
and is registered as a foreign company in Malaysia;
"financial year", in relation to a deed, means the period of
twelve months ending on the thirty-first day of December or on
such other date as is specified in lieu thereof in the deed;
"interest" means any right to participate or interest, whether
enforceable or not and whether actual, prospective or contingent--
(a) in any profits, assets or realization of any financial or
business undertaking or scheme, whether in Malaysia or
elsewhere;
(b) in any common enterprise whether in Malaysia or elsewhere,
in which the holder of the right or interest is led to expect
profits, rent or interest from the efforts of the promoter
of the enterprise or a third party;
(c) in any time-sharing scheme; or
(d) in any investment contract,
whether or not the right or interest is evidenced by a formal
document and whether or not the right or interest relates to a
physical asset, but does not include--
(e) any share in or debenture of a corporation;
(f) any interest in or arising out of a policy of life insurance;
(g) any interest in a partnership agreement unless the
agreement--
(i) relates to an undertaking, scheme, enterprise or
investment contract promoted by or on behalf of
a person whose ordinary business is or includes
the promotion of similar undertakings, schemes,
enterprises or investment contracts, whether or
not that person is a party to the agreement; or
(ii) is an agreement, or is within a class of agreements,
prescribed by regulations for the purposes of this
paragraph; or
(h) any participatory interest in a unit trust scheme as defined
in section 2 of the Securities Industry Act 1983;
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"investment contract" means any contract, scheme or arrangement
which in substance and irrespective of the form thereof involves
the investment of money in or under such circumstances that the
investor acquires or may acquire an interest in or right in respect
of property which under or in accordance with the terms of investment
will, or may at the option of the investor, be used or employed in
common with any other interest in or right in respect of property
acquired in or under like circumstances and includes any contract,
scheme or arrangement which in substance and irrespective of the
form thereof entitles the investor to a right to use or enjoy any
s p o r t , recreational, holiday or other related facilities for a
consideration and for a duration of not less than twelve months
whether or not on a recurring basis;
"management company", in relation to any interests issued or
proposed to be issued or any deed that relates to any interests
issued or proposed to be issued means a company by or on behalf
of which the interests have been or are proposed to be issued and
includes any person for the time being exercising the functions of
the management company;
"proclaimed country" means a country which the Minister has,
by notice published in the Gazette, declared to be a proclaimed
country for the purposes of the Division;
" t i m e - s h a r i n g scheme" means a scheme, undertaking or
enterprise--
(a) participants in which are, or may become, entitled to use,
occupy or possess, for two or more periods during the
period for which the scheme, undertaking or enterprise,
whether in Malaysia or elsewhere is to operate, property
to which the scheme, undertaking or enterprise relates;
and
(b) that is to operate for a period of not less than three years.
(2) A reference in this Division to a deed shall be read as
including a reference to any instrument amending or affecting the
deed.
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Approved deeds
85. For the purposes of this Division, a deed shall be an approved
deed if--
(a) the Registrar has granted his approval to the deed under
this Division; and
(b) the Minister has granted his approval under this Division
to the trustee or representative appointed for the purposes
of the deed acting as trustee or representative and that
a p p r o v a l has not been revoked and the trustee or
representative has not ceased to hold office.
Approval of deeds
86. (1) Where a deed makes provision for the appointment of a
company as trustee for or representative of the holders of interests
issued or proposed to be issued by a company the Registrar may,
subject to this section, grant his approval to the deed.
(2) The Registrar shall not grant his approval to a deed unless
the deed--
(a) complies with the requirements of this Division; and
(b) makes provision for such other matters and things as are
required by or under the regulations to be included in the
deed and if regulations have been made prescribing the
charges that may be made by a management company,
unless the deed provides--
(i) that the charges to be made by the management
company do not exceed such percentages or amounts
as are prescribed; and
(ii) that the price at which the interests to which the
deed relates are to be sold or purchased by the
management company are consistent with the
regulations relating to those prices.
(3) Within seven days after a deed has been approved under
this section, the management company shall lodge in the office of
the Registrar the deed, or a copy of the deed verified by statutory
declaration, and the copy shall for all purposes, in the absence of
proof that it is not a true copy, be regarded as an original.
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Approval of trustees
87. (1) The Minister on the recommendation of Bank Negara
Malaysia may, subject to such terms and conditions as he thinks
fit, grant his approval to a company acting as trustee or representative
for the purposes of a deed.
( 2 ) N o t w i t h s t a n d i n g subsection (1) the Minister on the
recommendation of Bank Negara Malaysia may, having regard to
the nature of the undertaking, scheme or enterprise, contract or
arrangement to which a deed relates, grant his approval subject to
such terms and conditions as he thinks fit to such other person
acting as trustee or representative for the purpose of the deed.
(3) The Minister may, at any time, by reason of a breach of a
term or condition subject to which the approval was granted or for
any other reason, revoke an approval granted by him under this
section.
Covenants to be included in deeds
88. (1) A deed shall, for the purposes of paragraph 86(2)(a),
contain covenants to the following effect, namely:
(a) a covenant binding the management company that it will
use its best endeavours to carry on and conduct its business
in a proper and efficient manner and to ensure that any
undertaking, scheme or enterprise to which the deed relates
is carried on and conducted in a proper and efficient
manner;
(b) covenants binding the management company--
(i) that the management company will pay to the
trustee or representative, within thirty days after
their receipt by the company, any moneys that,
under the deed, are payable by the company to the
trustee or representative;
(ii) that the management company will not sell any
interest to which the deed relates otherwise than
at a price calculated in accordance with the deed;
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(iii) that the management company will, at the request
of the holder of an interest, purchase that interest
from the holder and that the purchase price will
be a price calculated in accordance with the deed;
and
(iv) that the management company will not, without
the approval of the trustee or representative, publish
or cause to be published any advertisement, circular
or other document containing any statement with
respect to the sale price of interests to which the
deed relates or the yield therefrom or containing
any invitation to buy interests;
(c) covenants binding the trustee or representative that it
will--
(i) exercise all due diligence and vigilance in carrying
out its functions and duties and in watching the
rights and interests of the holders of the interests
to which the deed relates;
(ii) keep or cause to be kept proper books of account
in relation to those interests;
(iii) cause those accounts to be audited at the end of
each financial year by an approved company auditor;
and
(iv) send or cause to be sent by post a statement of the
accounts with the report of the auditor thereon
within two months of the end of the financial
year, to each of the holders of those interests;
(d) a covenant binding the management company and the
trustee or representative, respectively, that no moneys
available for investment under the deed will be invested
in or lent to the management company, or to the trustee
or representative, or to any company (other than a prescribed
corporation within the meaning of subsection 38(6)) which
is by virtue of section 6 deemed to be related to the
management company or to the trustee or representative;
(e) a covenant binding the management company that, to the
same extent as if the trustee or representative were a
director of the company, the company will--
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(i) make available to the trustee or representative, or
to any approved company auditor appointed by it,
for inspection the whole of the books of the company
whether kept at the registered office or elsewhere;
and
(ii) give to the trustee or representative or to any such
auditor such oral or written information as it or
he requires with respect to all matters relating to
t h e undertaking, scheme or enterprise of the
company or any property (whether acquired before
or after the date of the deed) of the company or
otherwise relating to the affairs thereof;
(f) a covenant binding the management company that the
management company will make available, or ensure that
there is made available, to the trustee or representative
such details as the trustee or representative requires with
respect to all matters relating to the undertaking, scheme
or enterprise to which the deed relates;
(g) as from a day to be fixed by the Minister by notice
published in the Gazette, covenants binding the management
company and the trustee or representative respectively,
t h a t the management company or the trustee or
representative, as the case may be, will not exercise the
right to vote in respect of any shares relating to the
interests to which the deed relates held by the management
company, trustee or representative at any election for
directors of a corporation whose shares are so held, without
the consent of the majority of the holders of the interests
to which the deed relates present in person and voting
given at a meeting of those holders summoned in the
manner provided for in paragraph (h)(i) and (ii) for the
purpose of authorizing the exercise of the right at the
next election; and
(h) a covenant binding the management company that the
management company will within twenty-one days after
an application is delivered to the company at its registered
office, being an application by not less than fifty or one-
tenth in number, whichever is the less, of the holders of
the interests to which the deeds relates--
(i) by sending notice by post of the proposed meeting
at least seven days before the proposed meeting
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to each of those holders at his last known address
or in the case of joint holders to the joint holder
whose name stands first in the company's records;
and
(ii) by publishing at least fourteen days before the
proposed meeting an advertisement giving notice
of the meeting in a newspaper circulating generally
throughout Malaysia,
summon a meeting of the holders for the purpose of
laying before the meeting the accounts and balance sheet
which were laid before the last preceding annual general
meeting of the management company or the last audited
statement of accounts of the trustee or representative,
and for the purpose of giving to the trustee or representative
such directions as the meeting thinks proper.
(2) A meeting summoned for the purposes of a covenant contained
in a deed in pursuance of paragraph (1)(g) or (h) shall be held at
the time and place specified in the notice and advertisement, being
a time not later than two months after the giving of the notice,
under the chairmanship of--
(a) such person as is appointed in that behalf by the holders
of the interests to which the deed relates present at the
meeting; or
(b) where no such appointment is made, a nominee of the
trustee or representative approved by the Registrar,
and shall be conducted in accordance with the deed or, so far as
the deed makes no provision, as directed by the chairman of the
meeting.
(3) Notwithstanding anything to the contrary contained in an
approved deed, the undertaking, scheme, enterprise, contract or
arrangement to which the deed relates may be continued in operation
or existence if it appears to be in the interests of the holders of
the interests to which the deed relates during such period as is or
such periods as are agreed upon by the trustee or representative
and the management company.
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(4) Where a direction is given to the trustee or representative
at a meeting summoned pursuant to a covenant complying with
paragraph (1)(h), the trustee or representative--
(a) shall comply with the direction unless it is inconsistent
with the deed or this Act; and
(b) shall not be liable for anything done or omitted to be
done by it by reason only of its following that direction.
(5) Where the trustee or representative is of the opinion that
any direction so given is inconsistent with the deed or this Act or
is otherwise objectionable, the trustee or representative may apply
to the Court for an order confirming, setting aside or varying the
direction and the Court may make such order as it thinks fit.
Interests to be issued by companies only
89. No person except a company or an agent of a company
authorized in that behalf under the seal of the company shall issue
or offer to the public for subscription or purchase or shall invite
the public to subscribe for or purchase any interest.
Statement to be issued
90. (1) Before a company or an agent of a company issues or
offers to the public for subscription or purchase or invites the
public to subscribe for or purchase any interest, the company shall
issue or cause to be issued a statement in writing in connection
therewith, which statement shall for all purposes be deemed to be
a prospectus issued by a company, and subject to subsection (2)
all provisions of this Act relating to prospectuses or to the offering
or to an intended offering of shares for subscription or purchase
to the public shall, with such adaptations as are necessary, apply
and have effect accordingly as if the interest were shares offered
or intended to be offered to the public for subscription or purchase
and as if persons accepting any offer or invitation in respect of or
subscribing for or purchasing any such interest were subscribers
for shares.
(2) Subject to subsection (3) the statement shall set out--
(a) the matters and reports specified in the Seventh Schedule;
and
(b) such other matters as are required by or under the regulations
to be set out in the statement,
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with such adaptations as the circumstances of each case require
and the Registrar approves.
(3) A matter or report referred to in subsection (2) may be
omitted from a statement if having regard to the nature of the
interest the Registrar is of the opinion that the matter or report is
not appropriate for inclusion in the statement and has by writing
under his hand approved the omission.
No issue without approved deed
91. (1) A person shall not issue or offer to the public for subscription
or purchase or invite the public to subscribe for or purchase any
interest unless, at the time of the issue, offer or invitation, there
is in force, in relation to the interest, a deed that is an approved
deed.
(2) A person shall not in any deed, prospectus, statement,
advertisement or other document relating to any interest make any
reference to an approval of a deed or of a trustee or representative
granted under this Division.
(3) Where--
(a) an interest issued by a corporation before the date of
commencement of this Act is in existence immediately
before that date;
(b) this Division would have applied in relation to the issue
of the interest if the interest had been issued on or after
that date;
(c) there is not, at the expiration of three months after that
date, a deed that is an approved deed in force in relation
to the interest; and
(d) the corporation did not, within a period of one month
after that date, apply for approval under this Division of
a deed in relation to the interest or, if it did so apply,
approval was refused,
the corporation shall, within fourteen days after the expiration of
the period referred to in paragraph (c), give to the holder of the
interest and to the Registrar notice in writing that there is not in
force in relation to that interest a deed that is an approved deed
and, if this subsection is not complied with, each director of the
corporation shall, in addition to the corporation, be deemed to
have failed to comply with this subsection.
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(4) The Minister may modify the application to a corporation
of subsection (3) by extending any period referred to in that subsection
or may exempt any corporation from compliance with that subsection.
(5) Nothing in subsection (3) shall be construed as authorizing
the Registrar to grant his approval to a deed that relates to an
interest issued by a corporation that is not a company for the
purposes of this Division.
Register of interest holders
92. (1) The management company shall, in respect of each deed
with which the company is concerned, keep a register of the holders
of interests under the deed and enter therein--
(a) the names and addresses of the holders;
(b) the extent of the holding of each holder and, if his interest
consists of a specific interest in any property, a description
of the property and its location sufficient to identify it;
(c) the date at which the name of each person was entered
in the register as a holder; and
(d) the date at which any person ceased to be a holder.
(2) Division 4 of Part V shall so far as is applicable and with
such adaptations as are necessary apply to and in relation to the
register.
(3) A management company which--
(a) keeps a register of holders of interests at a place within
three miles of the office of the Registrar or, where the
registered office of a management company is within a
regional area, within three miles of the office of the
Regional Registrar; and
(b) provides reasonable accommodation and facilities for
persons to inspect and take copies of its list of interest
holders,
need not comply with the provision of paragraph 93(1)(a) in relation
to the deed under which the interests are held unless the Minister
by notice published in the Gazette otherwise directs.
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Returns, information, etc., relating to interests
93. (1) Where a deed is or has at any time been an approved deed,
the management company shall, so long as the deed or any deed
in substitution in whole or in part for the deed, remains in force,
lodge with the Registrar, within two months after the end of each
financial year applicable to the deed--
(a) a return containing a list of all persons who, at the end
of the financial year, were holders of the interests to
which the deed relates, showing the name and address of
each holder and the extent of his holding and, if his
interest consists of a specific interest in any property, a
description of the property and its location sufficient to
identify it;
(b) a summary of--
(i) all purchases and sales of land and marketable
securities affecting the interests of the holders
during the financial year; and
(ii) all other investments affecting the interests of the
holders made during the financial year, showing
the descriptions and quantities of those investments;
(c) a statement of the total amount of brokerage affecting the
interests of the holders paid or charged by the management
company during the financial year and the proportion
thereof paid to any stock or share broker, or any partner
employee or nominee of any stock or share broker, who
is an officer of the company and the proportion retained
by the company;
(d) a list of all parcels of land and marketable securities, and
other investments, held by the trustee or representative
in relation to the deed, as at the end of the financial year,
s h o w i n g the value of the land, securities or other
investments and the basis of the valuations; and
(e) such other statements and particulars, if any, as may be
prescribed.
(2) Any document required to be lodged with the Registrar by
the management company under subsection (1) shall be signed by
at least one director of the management company.
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(3) A company to which subsection (1) applies shall, if so
requested by any holder of an interest to which the deed relates
within a period of one month after the end of the financial year,
send by post or cause to be sent by post to the holder, within two
months after the end of the financial year, a copy of the documents
which the company is required to lodge with the Registrar by
virtue of subsection (1)(b) to (e).
Penalty for contravention of Division, etc.
94. (1) A person shall not--
(a) contravene or fail to comply with this Division; or
(b) fail to comply with a covenant contained or deemed to
be contained in any deed that is or at any time has been
an approved deed.
Penalty: *Imprisonment for five years or one hundred thousand
ringgit or both.
(2) A person shall not be relieved from any liability to any
holder of an interest by reason of any contravention of, or failure
to comply with this Division.
Winding up of schemes, etc.
95. (1) Where the management company under a deed is in
liquidation or where, in the opinion of the trustee or representative,
the management company has ceased to carry on business or has,
to the prejudice of holders of interests to which the deed relates,
failed to comply with the deed, the trustee or representative shall
summon a meeting of the holders.
(2) A meeting under subsection (1) shall be summoned--
(a) by sending by post notice of the proposed meeting at
least twenty-one days before the proposed meeting, to
each holder at his last known address, or, in the case of
joint holders, to the joint holder whose name stands first
in the company's records; and
(b) by publishing, at least twenty-one days before the proposed
meeting, an advertisement giving notice of the meeting
in a newspaper circulating generally throughout Malaysia.
*NOTE--Previously "Imprisonment for twelve months or two thousand five hundred ringgit"see
Companies (Amendment) Act 1986 [Act A657].
-- Previously "Imprisonment for three years or ten thousand ringgit"see Companies (Amendment)
(No. 2) Act 1992 [Act A836].
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(3) Subsection 88(2) shall apply to such a meeting as if the
meeting were a meeting referred to in that section.
(4) If at any such meeting a resolution is passed by a majority
in number representing three-fourths in value of the holders of the
interests present and voting either in person or by proxy at the
meeting that the undertaking, scheme, enterprise, contract or
arrangement to which the deed relates be wound up, the trustee
or representative shall apply to the Court for an order confirming
the resolution.
(5) On an application by the trustee or representative the Court
may, if it is satisfied that it is in the interest of the holders of the
interests, confirm the resolution and may make such orders at it
thinks necessary or expedient for the effective winding up of the
undertaking, scheme, enterprise, contract or arrangement.
Power to exempt from compliance with Division and non-
application of Division in certain circumstances
96. (1) The Minister may, by notice published in the Gazette and
subject to such terms and conditions as are specified in the notice,--
(a) exempt any company or class of companies or person or
class of persons from complying with all or any of the
provisions of this Division in relation to any interest or
class of interests specified in the notice; or
(b) declare that all or any of the provisions of this Division
shall not apply to any interest or class of interests specified
in the notice, upon a request made by the Minister charged
with the responsibility for finance on the grounds--
(i) that the interest or class of interests is more
appropriately regulated as a securities or futures
contract, as the case may be; and
(ii) that any issue of, offer for subscription or purchase
of, or invitation to subscribe for or purchase, such
i n t e r e s t or class of interests would be more
a p p r o p r i a t e l y regulated under the Securities
Commission Act 1993, the Securities Industry Act
1983 or the Futures Industry Act 1993, as the case
may be,
and may, by notice published in the Gazette, revoke such notice
or vary it in such manner as he thinks fit.
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(1A) Where a company or person contravenes or fails to comply
with any term or condition specified in a notice of exemption
granted under paragraph (1)(a), every officer of the company or
person who is in default shall be guilty of an offence against this
Act.
Penalty: Imprisonment for five years or one hundred thousand
ringgit or both.
(2) This Division shall not apply in the case of the sale of any
interest by a personal representative, liquidator, receiver or trustee
in bankruptcy in the normal course of realization of assets.
Liability of trustees
97. (1) Subject to this section, any provision contained in a deed
that is or at any time has been an approved deed, or in any contract
with the holders of interests to which such a deed relates, shall be
void so far as it would have the effect of exempting a trustee or
representative under the deed from, or indemnifying a trustee or
representative against, liability for breach of trust where the trustee
or representative fails to show the degree of care and diligence
required of a trustee or representative.
(2) Subsection (1) shall not invalidate--
(a) any release otherwise validly given in respect of anything
done or omitted to be done by a trustee or representative
before the giving of the release; or
(b) any provision enabling such a release to be given--
(i) on the agreement thereto of a majority of not less
than three-fourths of the holders of interests as
vote in person or by proxy at a meeting summoned
for the purpose; and
(ii) either with respect to specific acts or omissions or
on the trustee or representative ceasing to act.
DIVISION 6
TITLE AND TRANSFERS
Nature of shares
98. The shares or other interest of any member in a company shall
be movable property, transferable in the manner provided by the
articles, and shall not be of the nature of immovable property.
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Numbering of shares
99. (1) Each share in a company shall be distinguished by an
appropriate number.
(2) Notwithstanding subsection (1)--
(a) if at any time all the issued shares in a company or all
the issued shares therein of a particular class are fully
paid up and rank equally for all purposes, none of those
shares need thereafter have a distinguishing number so
long as each of those shares remains fully paid up and
ranks equally for all purposes with all shares of the same
class for the time being issued and fully paid up; or
(b) if all the issued shares in a company are evidenced by
certificates in accordance with section 100 and each
certificate is distinguished by an appropriate number and
that number is recorded in the register of members, none
of those shares need have a distinguishing number.
Certificate to be evidence of title
100. (1) A certificate under the common or official seal of a
company specifying any shares held by any member of the company
shall be prima facie evidence of the title of the member to the
shares.
(2) Every share certificate shall be under the common seal of
the company or (in the case of a share certificate relating to shares
on a branch register) the common or official seal of the company
and shall state as at the date of the issue of the certificate--
(a) the name of the company and the authority under which
the company is constituted;
(b) the address of the registered office of the company in
Malaysia, or where the certificate is issued by a branch
office, the address of that branch office; and
(c) the nominal value and the class of the shares and the
extent to which the shares are paid up.
(3) Failure to comply with this section shall not affect the rights
of any holder of shares.
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(4) If default is made in complying with this section the company
and every officer of the company who is in default shall be guilty
of an offence against this Act.
Company may have duplicate common seal
101. A company may if authorized by its articles have a duplicate
common seal which shall be a facsimile of the common seal of the
company with the addition on its face of the words "Share Seal"
and a certificate under the duplicate seal shall be deemed to be
sealed with the common seal of the company for the purposes of
this Act.
Loss or destruction of certificates
102. (1) Subject to subsection (2) where a certificate or other
document of title to shares or debentures is lost or destroyed, the
company shall on payment of a fee not exceeding two ringgit issue
a duplicate certificate or document in lieu thereof to the owner on
his application accompanied by--
(a) a statutory declaration that the certificate or document
has been lost or destroyed, and has not been pledged sold
or otherwise disposed of, and, if lost, that proper searches
have been made; and
(b) an undertaking in writing that if it is found or received
by the owner it will be returned to the company.
(2) Where the value of the shares or debentures represented by
the certificate or document is greater than five hundred ringgit, the
directors of the company may, before accepting an application for
the issue of a duplicate certificate or document, require the applicant--
(a) to cause an advertisement to be inserted in a newspaper
circulating in a place specified by the directors stating
that the certificate or document has been lost or destroyed
and that the owner intends after the expiration of fourteen
days after the publication of the advertisement to apply