Malaysia legislation
Section 91
Section 91
(2)
Subsection (1) shall not apply in a case where the interest of the director of a Labuan company consists only in him being a member or creditor of another Labuan company which is interested in a contract or proposed contract with the first-mentioned company, if that interest may properly be regarded as not being a material interest.
Labuan Companies 97
(3)
For the purposes of this section, a resident director shall be deemed to be interested in all contracts or proposed contracts with any Labuan company of which he is a director and to be exempted from any requirement of circulation of notice or declaration in writing; and an oral declaration noted in the minutes is deemed sufficient compliance with the provisions of subsection (1).
(4)
Subject to any contrary provision in the articles of a Labuan company, a director of the company shall not, for the purposes of this section, be deemed to be interested in or to have at any time been interested in a contract or proposed contract, by reason that the contract or proposed contract—
(a)
has been or will be made with;
(b)
is for the benefit of; or
(c)
is on behalf of, a company which, by virtue of the provisions of section 4, is deemed to be a related company, and that he is also a director of that company.
(5)
For the purposes of subsection (1), a general notice given to the directors of a Labuan company by a director to the effect that he is an officer or a member of a specified corporation or a member of a specified firm and he is to be regarded as interested in any contract which may, after the date of the notice, be made with that company or firm shall be deemed to be sufficient declaration of interest in relation to any contract so made, but no such notice shall be of effect unless either it is given at a meeting of the directors or the director takes reasonable steps to ensure it is brought up and read at the next meeting of the directors after it is given.
(6)
Every director of a Labuan company who holds any office or possesses any property whereby, whether directly or indirectly, duties or interests might be created in conflict with his duties or interests as a director, shall declare at a meeting of the directors of the company
98 Laws of Malaysia ACT 441
or cause to be circulated in writing to the other directors the fact and the nature, character and extent of the conflict:
Provided that this subsection shall not apply to a resident director unless the articles of the company otherwise provide.
(7)
The declaration required of a director under subsection (6)
shall be made at the first meeting of the directors held—
(a)
after he becomes a director; or
(b)
(if he is already a director) after he commences to hold the office or to possess the property, unless the fact has already been circulated in writing before that meeting.
(8)
Every declaration under this section shall be recorded in the minutes of the meeting at which it was made.
(9)
This section shall be in addition to and not in derogation of the operation of any rule of law or any provision in the articles of a
Labuan company restricting a director of that company from having any interest in contracts with the company or from holding office or possessing properties involving duties or interests in conflict with his duties or interests as a director:
Provided that this subsection does not apply to a resident director unless the articles of the company otherwise provide.
(10)
For the purposes of this section, an interest of a director shall be treated as including an interest of a member of the director’s family and the words “member of the director’s family” shall include his spouse, son, adopted son, step-son, daughter, adopted daughter and step-daughter.
(11)
If default is made in complying with this section, the director of the company who is in default commits an offence under this Act.
Labuan Companies 99
Penalty: Three million ringgit or imprisonment for a term not exceeding five years or both.
Duty and liability of officers