Section 18 — TAKAFUL ACT 1984

(a)

pay any dividend on its shares until all its capitalized expenditure (including preliminary expenses, organization expenses, share selling commission, brokerage, amounts of losses incurred, and any other item of expenditure not represented by tangible assets) has been completely written off;

(b)

grant an advance, a loan, a credit facility, or a financing facility against the security of its own shares;

(c)

except in such special circumstances and in such amounts as the Director General may allow, grant an advance, a loan, a credit facility, or a financing facility—

(i)

to any of its directors other than an advance, a loan, a credit facility, or a financing facility secured by a certificate in name of the directors;

(ii)

to a firm in which it or any of its directors has any interest as partner, manager, or agent, or to an individual for whom or a firm for which any of its directors is a guarantor;

(iii)

to a company in which any of its directors owns twenty per cent of the voting shares or more;

(iv)

to a company in which the operator owns twenty per cent of the voting shares or more;

(v)

to a company which owns twenty per cent of the voting shares of the operator or more; and

(vi)

to a company in which a company mentioned in subparagraph (v) owns twenty per cent of the voting shares or more;

(d)

except in such special circumstances and in such amounts as the Director General may allow, grant to a person other than its employee or to any person mentioned in paragraph (c) an unsecured advance, unsecured loan, unsecured credit facility, or unsecured financing facility;

(e)

except in such special circumstances as the Director General may allow, act as guarantor on an advance, a loan, a credit facility, or a financing facility granted to any person mentioned in paragraph (c); and

(f)

except with the approval of the Director General, pledge, mortgage or charge any of its assets or securities.

(2)

All the directors of the operator shall be liable jointly and severally to indemnify the operator against any loss arising from the making of an unsecured advance, unsecured loan, unsecured credit facility, or unsecured financing facility.

(3)

For the purposes of subsection (1), "director" shall be deemed to include the wife, husband, father, mother, son, or daughter of a director.

(4)

For the purposes of this section and section 19, "unsecured advance", "unsecured loan", "unsecured credit facility", or "unsecured financing facility" means respectively—

(a)

an advance, a loan, a credit facility, or a financing facility made without security; or

(b)

in the case of an advance, a loan, a credit facility, or a financing facility made with security, any portion of the advance, loan, credit facility, or financing facility which at any time exceeds—

(i)

the market value of the assets constituting the security; or

(ii)

the value of the assets constituting the security assessed on a basis approved by the Director General where he is satisfied that there is no established market value.

(5)

Nothing shall preclude the operator from investing its fund in any manner allowed by the Syariah.