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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--