Co-Operative Societies Act 1993

This Act shall come into operation on a date to be appointed by the Minister by notification to be published in the Gazette, and the

Minister may appoint different dates for the coming into force of this

Act in different parts of Malaysia or for the coming into force of different provisions of this Act.

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Interpretation

voluntary and open membership;

democratic member control;

member economic participation;

autonomy and independence;

education, training and information;

co-operation among co-operative society; and

concern for community;

“corporation” has the same meaning as defined in the Companies Act 1965 [Act 125];

“credit facility” has the same meaning as defined in the Malaysia Co-operative Societies Commission Act 2007;

“delegate” means—

a representative of individual members elected at a regional meeting of members of a primary co-operative society in which the general meeting of members is replaced by a general meeting of delegates; or

a representative of a co-operative society which is itself a member of another co-operative society , the meetings of which such representative has been elected or appointed to attend;

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“ deposit” means a sum of money—

received or paid on terms under which it will be repayable, with or without return or interest or at a premium or discount; or

received or paid on terms under which it will be repayable, either wholly or in part, with any consideration in money or money’s worth, and such repayment being either on demand or at a time or in circumstances agreed by or on behalf of the person making the payment and the person receiving it, regardless whether the transaction is described as a loan, an advance, an investment, a saving, a sale or a sale and repurchase, but does not include money paid bona fide—

by way of an advance or a part payment under a contract for the sale, hire or other provision of property or services, and is repayable only in the event that the property or services is not or are not in fact sold, hired or otherwise provided;

the chief executive officer;

any person empowered by the Board, regulations or orders or by-laws to give directions in regard to the business of the co-operative society; or

any employee;

“patronage rebate” means a share of the profits of a co-operative society divided among its members in proportion to the volume of business done with the co-operative society by them from which such profits were derived;

“prescribed”, where no mode is mentioned, means prescribed from time to time by order published in the Gazette, and a power to prescribe includes the power to prescribe differently for different persons, classes, categories or description of persons;

“prescribed co-operative society” means a co-operative society prescribed by the Commission by order in writing according to its class, category, type, activity and description;

“primary co-operative society” means a co-operative society as provided for under subsection 4(1);

“property” means any movable or immovable property and includes—

any right, interest, title, claim, chose in action, power or privilege, whether present or future, or whether vested or contingent, in relation to any property, or which is otherwise of value;

any conveyance executed for conveying, assigning, appointing, surrendering, or otherwise transferring or disposing of property whereof the person executing the conveyance is proprietor or possessed or wherein he is

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entitled to a contingent right, either for the whole interest or for any less interest;

any security, including any stock, share, debenture and fund;

any negotiable instrument, including any bank note, bearer note, treasury bill, dividend warrant, bill of exchange, promissory note, cheque and negotiable certificate of deposit;

any mortgage or charge, whether legal or equitable, guarantee, lien or pledge, whether actual or constructive, letter of hypothecation or trust receipt, indemnity, undertaking or other means of securing payment or discharge of a debt or liability, whether present or future, or whether vested or contingent; and

any other tangible or intangible property;

“registrable offence” means an offence which is registrable under the

Registration of Criminals and Undesirable Persons Act 1969 [Act 7]

as specified in the First and Second Schedules to that Act;

“regulations” means regulations made under this Act;

“related corporation” means a subsidiary or associate corporation of a co-operative society or an associate corporation of a subsidiary or subsidiaries of a co-operative society;

“return” includes any form of rental, profit, dividend or benefit, including any fee or gift, payable or to be given in relation to any dealing, transaction or instrument;

“secondary co-operative society” means a co-operative society as provided for under subsection 4(2);

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“securities” has the same meaning as defined in the Securities

Commission Act 1993 [Act 498];

“share” means a share in the share capital of a co-operative society contributed by a member in respect of his membership in that co-operative society;

“specific savings” means money deposited by a member with a co-operative society with the express intention of utilizing the money deposited for a specified purpose permitted under the regulations;

“specified”, where no mode is mentioned, means specified from time to time in writing, and a power to specify includes the power to specify differently for different persons, classes, categories or description of persons;

“Statutory Reserve Fund” means a fund maintained by every co-operative society in pursuant to subsection 57(1) out of the audited net profit of each year;

“subscription” means the sum contributed at regular intervals by a member in respect of his membership in a co-operative society and may not be withdrawn except under such conditions as laid down in the by-laws or on a termination of membership;

“subsidiary” of a co-operative society means a company, as defined in the Companies Act 1965 [Act 125], in which such co-operative society controls the composition of the Board of Directors or more than half of the voting power, or holds more than half of the issued share capital, and includes a subsidiary, as defined in that Act, of such a company;

“surplus funds” means, subject to regulations, the funds in excess of the amounts required for immediate use by a co-operative society as working capital for its business, which may be deposited or invested away from the co-operative society without affecting the operation of such business;

“tertiary co-operative society” means a co-operative society as provided for under subsection 4(3).

A co-operative society which consists of primary co-operative societies only and which has as its object the facilitation of the operations of such co-operative societies may be registered under this

Act as a secondary co-operative society.

A co-operative society which consists of secondary co-operative societies only or of secondary and primary co-operative societies and which has as its object the facilitation of the operations of such co-operative societies may be registered under this Act as a tertiary co-operative society.

it consists of at least fifty individual persons; and

each of such individual persons is qualified for membership under section 26 and is not disqualified for membership under section 27.

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No co-operative society shall be registered as a secondary co-operative society unless it consists of at least two primary co-operative societies.

No co-operative society shall be registered as a tertiary co-operative society unless it consists of at least two secondary co-operative societies.

in the case of a primary co-operative society, by at least ten persons all of whom qualify for membership;

in the case of a secondary co-operative society or a tertiary co-operative society, by a duly authorized person on behalf of each primary co-operative society or secondary co-operative society, as the case may be.

The application for registration shall be accompanied by—

Every co-operative society registered under subsection (1)

shall be with limited liability.

Where the Commission refuses to register a co-operative society, an appeal shall lie to the Minister against such refusal within two months from the date of such refusal.

The word “Koperasi” shall form part of the name of every co-operative society registered under this Act.

The word “Berhad” shall be the last word in the name of every co-operative society registered under this Act.

Notwithstanding paragraph 6(2)(b), the application for registration of such a co-operative society as is referred to in subsection

shall be accompanied by minutes of the inaugural general meeting signed by all persons present.

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Any person who contravenes subsection (1) commits an offence and shall, on conviction, be liable to a fine not exceeding five million ringgit or to imprisonment for a term not exceeding five years or to both.

Any person who contravenes subsection (1) commits an offence and shall, on conviction, be liable to a fine not exceeding five million ringgit or to imprisonment for a term not exceeding five years or to both and shall in addition, be liable to a daily fine of five thousand ringgit for each day during which the offence continues after conviction.

the registered name of the co-operative society; or

with the prior written approval of the Commission, such other name or logo as may be descriptive of the co-operative society.

a copy of this Act and the regulations or orders, directives or guideline;

a copy of its by-laws and last audited accounts;

a list of its members;

a list of the members of the Board;

the name of its chief executive officer, if any; and

a list of officers of the co-operative society concerned with the management of the co-operative society, if any, open to inspection, free of charge, at all reasonable times at the registered address of the co-operative society to members only.

Any co-operative society or officer of the co-operative society who fails to comply with subsection (1) commits an offence and shall, on conviction—

a list of members of the Board not later than fifteen days after its annual general meeting;

minutes of all general meetings not later than thirty days after the date of the meetings;

such other information as the Commission may require in regard to the constitution, membership, working and financial condition of the co-operative society , including the minutes of the Board meeting.

Any co-operative society or officer of the co-operative society who fails to comply with subsection (1) commits an offence and shall, on conviction—

No officer of any co-operative society shall, in any legal proceedings to which the co-operative society is not a party, be compelled to produce any of the co-operative society’s books, the contents of which can be proved under subsection (1), or to appear as a witness to prove any matters, transactions or accounts therein recorded, unless the court for special reasons so directs.

The Commission may, at any time, require the by-laws of a co-operative society to contain provisions relating to secrecy or permitted disclosures and such by-laws shall, subject to subsection (1), bind the co-operative society and its members.

Subject to any regulations or orders or directives or guidelines, every co-operative society shall review its by-laws and effect the

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necessary amendments within two years from the date of coming into operation of this Act, or such further period as approved by the

Commission, to ensure its by-laws are consistent with this Act.

Where the co-operative society, after the review or amendment carried out under subsection (2), is of the opinion that its by-laws are consistent or otherwise, the Board of the co-operative society shall notify such fact to the Commission.

Any co-operative society or officer of the co-operative society who fails to comply with subsection (2) commits an offence and shall, on conviction—

No amendment of the by-laws of a co-operative society shall be valid until that amendment has been registered under this Act, for which purpose copies of the amendment shall be forwarded to the

Commission.

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If the Commission is satisfied that any amendment of the by-laws is not contrary to this Act or to the regulations, the Commission may register the amendment.

An appeal against the refusal of the Commission to register any amendment of any by-laws may be made to the Minister and such appeal shall be made within three months from the date of such refusal.

An amendment which changes the name of a co-operative society shall not affect any right or obligation of the co-operative society or of any of its members or past members, and any legal proceedings pending may be continued by or against the co-operative society under its new name.

When the Commission registers an amendment of the by-laws of a co-operative society, the Commission shall issue to the co-operative society a copy of the amendment certified by the

Commission, which shall be conclusive evidence of the fact that the amendment has been duly registered.

In this section, “amendment” includes the making of a new by-law and the variation or rescission of a by-law.

Power of the Commission to direct the convening of a general meeting for amendment of by-laws

any by-law of a co-operative society is ambiguous or doubtful in interpretation and is likely to mislead or it conflicts with or is inconsistent with this Act or any regulations made thereunder;

an amendment is necessary or desirable in the interest of the co-operative society; or

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upon the notification made by the Board of a co-operative society under subsection 17A(3), that the by-law of a co-operative society is inconsistent with this Act.

If no general meeting is convened within the time specified in subsection (1), the Commission may amend the by-laws of the co-operative society on its own motion and any amendment made shall be deemed to be a registered amendment under section 18.

No co-operative society shall grant any Islamic financing or credit facility or give any guarantee or undertaking to such financing or facility or transfer of any money or asset in any form to its subsidiaries except with the prior written approval of the Commission.

The Commission may, by a notice in writing, require any subsidiary of a co-operative society to comply with any requirement as imposed by this Act, regulations or orders or directives or guidelines.

Any co-operative society or officer of the co-operative society who fails to comply with subsection (1) or (2) commits an offence and shall, on conviction—

Any co-operative society or officer of the co-operative society who fails to comply with subsection (1) commits an offence and shall, on conviction, be liable to a fine not exceeding two hundred thousand ringgit.

any debt or outstanding demand payable to a co-operative society by any member or past member shall be a first charge on all crops or other agricultural produce, fish (fresh water and salt water), felled timber or other forest produce, marine produce, livestock, fodder, agricultural, industrial and fishing implements, plant, machinery, boats, tackle and nets, raw materials, stock-in-trade and generally all produce of labour and things used in connection with production raised, purchased or produced in whole or in part from any loan whether in money or in goods given to him by the co-operative society;

any outstanding demands or dues payable to a registered housing co-operative society by any member or past

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member in respect of rent, shares, loans or purchase money or any other rights or amounts payable to such co-operative society shall be a first charge upon his interest in the immovable property of the co-operative society.

Nothing in paragraph (1)(a) shall affect the claim of any bona fide purchaser or transferee without notice.

in the case of a deceased member who was a Muslim, to the legal representative of such member or to such person as

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may appear to the Board to be a person entitled to such share, return or interest pursuant to any distribution made under any law relating to the distribution of estate; or

in the case of a deceased member who was not a Muslim, to the person nominated in accordance with the regulations in his behalf or, if there is no person so nominated, to such person as may appear to the Board to be the heir or legal representative of such member, and may pay to such legal representative, nominee, heir or person, as the case may be, a sum representing the value of the deceased member’s share, return or interest, as the case may be, as ascertained in accordance with the regulations or its by-laws.

If the deceased member was not a Muslim, and the nominee, heir or legal representative is not qualified for membership in accordance with this Act, the regulations or the by-laws, the co-operative society may, on the application of such nominee, heir or legal representative, as the case may be, within six months of the death of such member, transfer the share, return or interest of such member to any person specified in the application who is so qualified.

Notwithstanding subsection (1), if six months have elapsed since the death of a member who was a Muslim and the co-operative society concerned is unable to ascertain who the legal representative of such member is or no legal representative has been appointed or the estate of such member has not been distributed or the estate of such member has been distributed but the co-operative society is unable to ascertain who the person entitled to such share, return or interest pursuant to such distribution is, the co-operative society may pay to the *Official Administrator a sum representing the value of the share, return or interest of such member, as ascertained in accordance with the regulations or its by-laws.

* NOTE—All references to “Official Administrator” shall be construed as “Corporation”–see section 2 and subsection 43(3) of Public Trust Corporation Act 1995 [Act 532].

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A co-operative society may pay all other moneys due to a deceased member from the co-operative society to the legal representative, *Official Administrator, nominee, heir or person, as the case may be, referred to in subsections (1) and (3).

Any deposit made by or for the benefit of the child may, together with the bonus, be paid to the child or to the guardian of that child for the use of that child.

The receipt of any child or guardian for money paid to him by a co-operative society under this section shall be a sufficient discharge of the liability of the co-operative society in respect of that money.

be a citizen of Malaysia;

have attained the age of eighteen years or, in the case of a school co-operative society, have attained the age of twelve years; and

be resident or be employed or be in ownership of land within the area of operations of the primary co-operative

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society, or, in the case of a school co-operative society, be a registered student of the school.

he is mentally disabled;

he is an undischarged bankrupt;

he is a person against whom a conviction stands for a registrable offence;

he has been expelled from membership under this Act and a period of one year has not elapsed from the date of such expulsion.

Notwithstanding subsection (1), a member of a secondary or a tertiary co-operative society may have such voting powers as are provided by the by-laws of such secondary or tertiary co-operative society.

Subject to sections 31 and 36, no member shall vote through another member and no delegate shall vote through another delegate.

Where in the by-laws of a co-operative society the amount of the liability of a member is expressed to be greater than the nominal value of any share held or subscribed for by him, then the liability of the member shall extend to such greater amount.

The estate of a deceased member of a co-operative society shall not be liable for the debts of the co-operative society, within the limitation provided in section 34A, as they existed on the date of his decease for a period of more than two years reckoned from the date of his decease.

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by delegates elected by individual members at their regional or area general meetings; or

by delegates of member co-operative societies, as the case may be.

agree on the submission of the application of the co-operative society to be registered;

adopt the proposed by-laws;

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elect the members of the Board; and

carry out such other matter as may be required by its by-laws or the Commission.

The inaugural general meeting provided in subsection (1) shall have all the powers similar as in the annual general meeting under section 39 and the members shall have the same rights at the inaugural general meeting as provided for under the regulations and by-laws.

Any co-operative society or officer of the co-operative society who fails to comply with subsection (1) commits an offence and shall, on conviction, be liable to a fine not exceeding two hundred thousand ringgit.

The Commission or any person authorized by the Commission may summon at any time a special general meeting of a co-operative society in such manner and at such time and place as the Commission may direct, and may specify what matters shall be discussed by the meeting; and such meeting shall have all the powers and be subject to the same rules as a general meeting called in accordance with this Act or the by-laws of the co-operative society.

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The duties and responsibilities of the Committee shall be provided in the by-laws.

For the purpose of this section, the word “officer” as defined in section 2 does not include members of the Internal Audit

Committee.

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convicted for an offence under this Act; or

dismissed as an officer of a co-operative society.

Notwithstanding subsection (1) and subject to any directives or guidelines as the Commission may specify, a co-operative society shall, prior to the appointment or reappointment of any person as a member of the Board, seek verification from the Commission on whether such person satisfies the fit and proper criteria as may be specified by the Commission.

Upon verification that such person has satisfied the fit and proper criteria under subsection (2), the co-operative society may appoint or re-appoint such person as a member of its Board.

From the third year of registration of a co-operative society, no person shall be appointed to be a member of the Board of such co-operative society unless he has been a member of such co-operative society for a minimum period of two years.

Subsection (4) shall not apply to a co-operative society with fifty or less members and to a school co-operative society.

Any member of the Board of a co-operative society who fails to comply with subsection (1) commits an offence and shall, on conviction, be liable to a fine not exceeding two hundred thousand ringgit.

Disclosure of interest in Islamic financing or credit facility by members of the Board or chief executive officer

For the purpose of subsection (1), a general notice in writing served on each of the member of the Board of a co-operative society referred to in that subsection by a member of the Board of a co-operative society to the effect that he has an interest in an Islamic financing or credit facility which, after the date of the notice may be granted to that person shall be deemed to be sufficient declaration of interest in relation to an Islamic financing or credit facility so granted if—

Any member of the Board or chief executive officer of a co-operative society who fails to comply with subsection (1) commits an offence and shall, on conviction, be liable to a fine not exceeding five hundred thousand ringgit or to imprisonment for a term not exceeding six months or to both.

after he becomes a member of the Board or chief executive officer, of a co-operative society; or

if he is already a member of the Board or chief executive officer of a co-operative society, after he commences to hold office or to possess the property by which the conflict may arise.

Any member of the Board or chief executive officer of a co-operative society who fails to comply with subsection (1) commits an offence and shall, on conviction, be liable to a fine not exceeding five hundred thousand ringgit or imprisonment for a term not exceeding six months or to both.

Notwithstanding subsection (1), no action, suit, prosecution or other proceedings shall be brought or instituted personally against any member of the Board or officer of a co-operative society in respect of any act done or statement made bona fide in pursuance or execution or intended execution of this Act, the regulations, orders or the by-laws of such co-operative society.

If the Board of a co-operative society has appointed a person as a chief executive officer to administer and manage the affairs of such co-operative society, such appointment shall not absolve the members of the Board from their liability and responsibility for the proper direction and conduct of the affairs of such co-operative society.

Any member of the Board of a co-operative society who fails to comply with subsection (1) commits an offence and shall, on conviction, be liable to a fine not exceeding two hundred thousand ringgit.

No member of the Board of a co-operative society appointed to represent such co-operative society on the board of directors of any of its subsidiaries shall receive or accept any remuneration from such subsidiary without the prior approval of the general meeting of such co-operative society.

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In this section, “allowance” means the remuneration paid to a member of the Board of a co-operative society in consideration of his services rendered to the co-operative society on a regular basis.

the Board of that co-operative society shall suspend such officer from being an officer of that co-operative society;

and

if such officer is also an officer of the Board of any other co-operative society, the Board of that other co-operative society shall suspend such officer from being an officer of that other co-operative society, from the time he is first charged in court until the final determination of the proceedings against him, including any further proceedings by way of appeal, and he shall accordingly cease to exercise any rights or perform any functions or duties in respect of such office and he shall not receive any remuneration in respect of such office during the period of suspension.

If an officer who has been suspended under subsection (1) is, upon the final determination of the proceedings against him, acquitted, he shall be paid such remuneration as would have been payable to him during the period of suspension but for the provisions of subsection

.

entrance fees, which shall not be refundable except in cases where an application for membership has been rejected;

shares subscribed and paid by members, of which a minimum number prescribed in the by-laws of such co-operative society shall not be withdrawable except after termination of membership, while shares subscribed in excess of this minimum contribution may be withdrawable or transferable or both, subject to the provisions of this Act and the regulations and to any limitations laid down in the by-laws of such co-operative society;

in the case of co-operative societies which have as their object the promoting of thrift among their members and the creating of a source of credit for their members, subscription;

specific savings of members, which shall be withdrawable subject to conditions laid down in the by-laws;

subject to subsection 52(1) or regulations, deposits or loans from members and with the approval from the

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Commission, from persons who are not members of the co-operative society;

surplus carried to the Reserve Account;

donations and grants made by third persons, except that no donations from any foreign source, whether offered directly or otherwise, shall be received by a co-operative society without the prior written approval of the Commission.

Subsection (1) shall not apply to a co-operative society that is permitted to grant any Islamic financing or credit facility given—

The Commission may, by order, prohibit or restrict the lending of money on a charge or mortgage of immovable property by any co-operative society or class, category or description of co-operative society.

Subject to section 52A and regulations, a co-operative society may borrow funds from persons who are not members of that co-operative society.

A co-operative society shall notify its members of its borrowings under subsection (1) at its annual general meeting.

Any co-operative society who fails to comply with this section commits an offence and shall, on conviction, be liable to a fine not exceeding five hundred thousand ringgit.

Any co-operative society who contravenes subsection (1)

commits an offence and shall, on conviction, be liable to a fine not exceeding five hundred thousand ringgit.

Any co-operative society or officer of the co-operative society who fails to comply with subsection (1), commits an offence and shall, on conviction—

any securities issued by the Government of Malaysia, Bank

Negara Malaysia or any other securities approved by the

Commission; or

shares of any other co-operative society.

Unless otherwise provided in the regulations, no co-operative society shall invest its surplus funds in—

Any co-operative society or officer of the co-operative society who fails to comply with subsection (2) commits an offence and shall, on conviction—

, no co-operative society shall acquire, hold or invest in any immovable property.

Subsection (1) shall not apply to a co-operative society where—

Any co-operative society or officer of the co-operative society who fails to comply with subsection (1) commits an offence and shall, on conviction—

the sale of land or building, or both, as fixed assets; and

the revaluation of land or building, or both, as fixed assets, with the approval of the Commission.

The capital gains referred to in paragraph (1)(a) may be utilized by the co-operative society for all or any of the following purposes:

No co-operative society shall utilize the capital gains referred to in subsection (1) for the purpose of issuing bonus shares unless and until all its accumulated and current losses, if any, have been completely written off.

The capital gains referred to in paragraph (1)(b) may be utilized by the co-operative society for the issue to its members of bonus shares which shall not be withdrawn except, with the approval of the Board, be transferred to another member of that co-operative society or, in the case of a member who dies after the issue of the bonus shares, be paid out of the Bonus Share Redemption Fund of that co-operative society.

The bonus shares redeemed by a co-operative society may be reissued as bonus shares to its members in accordance with the provisions of its by-laws.

A register of bonus shares shall be maintained by the co-operative society.

This section shall not apply to a co-operative society that is required by the provisions of any other written law governing its operations to deal with its capital gains in the manner provided in such law.

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maintain a Statutory Reserve Fund; and

before declaring any dividend from its audited net profits of each year, after due provision is made for taxation, transfer to its Statutory Reserve Fund out of the audited net profits of each year—

a sum equal to not less than twenty-five per centum of the audited net profits of that year, so long as the amount of the Statutory Reserve Fund is less than fifty per centum of its shares and subscription; or

Notwithstanding subsection (1), the Commission may from time to time specify a different portion of the audited net profits of each year, being either lesser or greater than the portions specified in subsection (1), to be transferred to the Statutory Reserve Fund of a co-operative society for the purpose of ensuring that the amount of the

Statutory Reserve Fund of such co-operative society is sufficient for the purpose of its business and adequate in relation to its liabilities.

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Notwithstanding subsection (1), the Statutory Reserve Fund may be applied—

Nothing in this section shall authorize a co-operative society to pay dividends out of the Statutory Reserve Fund.

The Statutory Reserve Fund shall be indivisible and no member shall be entitled to claim a specific share of it.

The Statutory Reserve Fund shall be maintained in a separate account and shall be invested in the Co-operative Deposit Account as referred to in the Malaysia Co-operative Societies Commission Act 2007.

Subject to subsection (7), every co-operative society shall, out of its audited net profits for each financial year, before declaring any dividend pay such sum as may be determined by the Commission to—

No secondary or tertiary co-operative society shall be declared under paragraph (2)(b) to be a body representing the co-operative movement at national and international level unless-Co-operative Societies 51

There may be deducted from the sum mentioned in subsection

any sum paid pursuant to subsection (2).

Subject to subsection (7), a co-operative society may, after the payments specified in subsections (1) and (2), utilize the audited net profits for each financial year for all or any of the following purposes:

No rebate on patronage, dividend on shares and subscriptions shall be payable to members of a co-operative society and no honoraria shall be payable to members of the Board of a co-operative society except out of the audited net profits of that co-operative society.

No co-operative society shall utilize its net profits for any purpose under subsection (2) or (5) unless and until all its accumulated losses, if any, have been completely written off.

Notwithstanding subsection (7), a co-operative society whose accumulated losses have not been completely written off may, with the approval of the Commission, utilize its audited net profits for the payment of dividends which shall not in any case exceed five per centum of the shares or subscriptions, or both, of members.

Every co-operative society shall cause appropriate entries to be made in the accounting and other records as soon as possible but not later than thirty days of the completion of the transactions to which they relate.

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Every co-operative society shall cause to be prepared as soon as possible but not later than two months after the completion of each financial year its trading and profit and loss accounts and balance sheet together with any other document required for the purpose of audit.

The records referred to in subsection (1) shall be kept at the registered office of the co-operative society or at such other place as the Board shall think fit and shall at all times be open to inspection by the Commission and by any person authorized by him generally or specially in writing.

The Commission may in any particular case order that the accounting and other records of a co-operative society, including those of its subsidiary or subsidiaries, if any, be open to inspection by an approved auditor acting for any member or officer of such co-operative society, but only upon an undertaking in writing given to the

Commission that any information acquired by the auditor during his inspection shall not be disclosed by him except to that member or officer.

Any co-operative society or officer of the co-operative society who fails to comply with subsection (1), (2), (3) or (4) commits an offence and shall, on conviction, be liable to a fine not exceeding two hundred thousand ringgit and shall, in addition, be liable to a daily fine not exceeding five hundred ringgit for each day during which the offence continues after conviction.

trading and profit and loss accounts, and any statement as may be determined by the Commission, for the period since the preceding accounts, or, in the case of the first account, since the registration of the co-operative society, or its

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subsidiary or subsidiaries, if any, made up to a date not more than twelve months before the date of the general meeting;

a balance sheet as at the date to which the accounts are made up;

a report signed by or on behalf of the Board with respect to the state of affairs of the co-operative society and its subsidiary or subsidiaries, if any; and

the auditor’s report referred to in section 63.

The accounts and balance sheet of a co-operative society and its subsidiary or subsidiaries, if any, duly audited shall be submitted to its members not less than fifteen days and to the Commission not less than thirty days before the annual general meeting, and the

Commission may make such observations as he deems fit on the accounts and balance sheet.

All the Commission’s observations that have financial effect on the co-operative society’s audited accounts and balance sheet shall be adjusted accordingly by the co-operative society and clearly shown in the audited accounts of the co-operative society in the next financial year.

Each report to which paragraph (1)(c) relates shall state with appropriate details—

In subsection (3), the expression “items of an abnormal character” includes—

Every trading and profit and loss account and balance sheet laid before a co-operative society in the annual general meeting, including any consolidated profit and loss account and consolidated balance sheet, shall give a true and fair view of the state of affairs of the co-operative society and of its subsidiary or subsidiaries, if any.

Any co-operative society or officer of the co-operative society who fails to comply with subsection (1), commits an offence and shall, on conviction, be liable to a fine not exceeding two hundred thousand ringgit and shall, in addition, be liable to a daily fine of five hundred ringgit for each day during which the offence continues after conviction.

an auditor approved by the Commission; or

an officer of the Commission.

Notwithstanding subsection (1), the Commission may at any time, of his own motion or on the application of a co-operative society, audit or cause to be audited the accounts of any co-operative society.

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such person applies in writing to the Commission to be so approved; and

the Commission is satisfied that such person is fit and competent to be so approved.

No person shall be approved to audit nor shall he audit the accounts of the same co-operative society for any continuous period exceeding six years, but such person may be approved to audit and may resume auditing the accounts of a co-operative society two years after he has ceased to audit the accounts of that co-operative society.

The approval for the appointment of the auditor under subsection (1) may be revoked if in the opinion of the Commission, the audit conducted by such auditor is not satisfactory.

Circumstances disqualifying a person from being approved or acting as auditor of a co-operative society

he is in any way indebted to the co-operative society or to any of its subsidiaries;

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(aa) he is a member of the co-operative society or a spouse to the officer of the co-operative society;

he is an officer of the co-operative society or a partner of such officer in any enterprise;

he is an employee of the co-operative society or a partner of such employee in any enterprise;

he is an employee of an officer of the co-operative society or an employee of such employee; or

he has been compounded or convicted of any offence under this Act, or the Companies Act 1965 or of any offence involving fraud or dishonesty under any other written law.

The auditor of a co-operative society shall audit and report on the financial statements submitted by the co-operative society after the close of the financial year.

The auditor of a co-operative society shall, in respect of the accounts, records and statements referred to in subsections (1) and (2), report—

The auditor of a co-operative society may at any other time report to the Commission and the co-operative society upon any matters arising out of the performance of the audit.

The audit of the accounts of a co-operative society shall include an examination of and report on overdue debts, if any, and an examination of and report on the valuation of the assets and liabilities of the co-operative society.

Any auditor who fails to comply with this section commits an offence and shall, on conviction, be liable to a fine not exceeding two hundred thousand ringgit or to imprisonment for a term not exceeding one year or to both.

the inspection of such books, accounts, documents, securities and cash, the copying of them, or the making of extracts from them, cannot reasonably be undertaken without seizing or detaining them;

such books, accounts, documents, securities and cash may be interfered with or destroyed unless seized or detained; or

such books, accounts, documents, securities and cash may be needed as evidence in any legal proceedings, whether civil or criminal, which may be instituted under or in connection with this Act, the Malaysia Co-operative

Societies Commission Act 2007 or any other written law.

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No co-operative society or officer of the co-operative society shall—

Any co-operative society or officer of the co-operative society who fails to comply with subsection (1) or (2) commits an offence and shall, on conviction—

For the purpose of an inquiry under subsection (1), the

Commission or the authorized person referred to in subsection (1) may summon any person, which the Commission or the authorized person has reason to believe, has knowledge of any of the affairs of the co-operative society and may examine such person on oath and may require any person to produce or surrender any books, accounts and documents in his custody belonging to the co-operative society and its related corporation, if any, if the Commission or such authorized person has reason to believe that such books, accounts and documents may furnish evidence of an offence under this Act, regulations or orders.

Every person authorized under subsection (1) shall, upon the completion of an inquiry under subsection (1), report his findings to the Commission.

The Commission may communicate to co-operative society result of inspection or inquiry

No inspection shall be made or directed under subsection (1)

on the application of a creditor of a co-operative society unless the creditor—

The Commission shall communicate the result of an inspection under subsection (1) to the creditor and the co-operative society.

is carrying on its business in a manner detrimental to the interests of the co-operative society, its members, its depositors, the co-operative society sector or the public generally;

is insolvent, or has become or is likely to become unable to meet all or any of its obligations, or is about to suspend payment to any creditors; or

has contravened any provision of this Act or the Malaysia

Co-operative Societies Commission Act 2007, or any condition of its registration under section 7 or any written law, regardless that there has been no criminal prosecution in respect thereof,

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the Commission may, by order in writing, exercise any one or more of the following powers, as the Commission deems necessary:

require the co-operative society to take any steps, or any action, or to do or refrain from doing any act or matters, in relation to the co-operative society, or its business or activities, or its officers;

suspend or remove from office any member of the Board of the co-operative society; or

appoint any person or persons as a member of the Board of the co-operative society, and provide such person or persons to be paid by the co-operative society any remuneration; or

dissolve the Board of the co-operative society;

appoint a person to advise the co-operative society in relation to the proper conduct of its business or activities, and provide in the order for such person to be paid by the co-operative society any remuneration; or

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Where any of the circumstances set out in paragraph (1)(a), (b), or (c) exists in respect of a co-operative society, the Commission may, whether or not it had exercised any of its powers under subparagraphs

An order of the Commission under subsection (1) or (2) may, from time to time, be modified, amended, varied or replaced either prospectively, or where it is practicable or unjust to do so, retrospectively, by a further order under subsection (1) or (2), as the case may be.

Any person aggrieved by the order of the Commission made under subparagraph (1)(i), (ii), (iii), (iv), (v) or (vi) may, within twenty-one days of the making of such order, appeal to Minister, who shall confirm or set aside such order and the decision of the Minister shall be final and conclusive.

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Any co-operative society or officer of the co-operative society who fails to comply with subparagraph (1)(i) or (ii) commits an offence and shall, on conviction, be liable to a fine not exceeding one million ringgit or to imprisonment for a term not exceeding one year or to both.

For the purposes of this section and section 69C “appointed person” means person appointed by the Commission, to act on its behalf, to assume control under paragraph (2)(a).

A person appointed by the Commission under subsubparagraph 69(1)(iv)(B), subparagraph 69(1)(v) or paragraph 69(2)(a) shall be appointed for a period not exceeding two years, but may be reappointed for three further consecutive periods not exceeding one year each, and shall, during such period of appointment or reappointment, hold his appointment or reappointment at the discretion of the Commission.

The terms and conditions of an appointment referred to in subsection (1) shall be determined by the Commission and shall be binding on the co-operative society concerned.

The appointment of a member of the Board of a co-operative society under subsubparagraph 69(1)(iv)(B) co-operative society to have further members of the Board where the maximum number of members of the Board allowed under section 42 has not already been reached or exceeded by the appointment.

A person appointed under subsection (1) shall not be liable to the co-operative society or incur any obligation to any member thereof

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or to any person for any act done by him in good faith, solely by reason of his holding such appointment.

Provisions in relation to removal from office under subparagraph 69(1)(iii) or subsubparagraph 69(1)(c)(iv)(A)

Any officer of the co-operative society who fails to comply with subsection (1) commits an offence and shall, on conviction, be liable to a fine not exceeding one million ringgit or to imprisonment for a term not exceeding one year or to both and shall, in addition, be liable to a daily fine of one hundred ringgit for each day during which the offence continues after conviction.

Throughout the period of control of a co-operative society pursuant to an order under paragraph 69(2)(a), there shall be vested in the Commission, or in the appointed person, as the case may be, all the powers of the co-operative society and its members and of members of

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its Board, under the by-laws of the co-operative society, or exercisable by the co-operative society or its members or members of its Board under any written law, regardless whether such powers are exercisable by resolution, special resolution, or in any other manner, and any difficulty arising in relation thereto may be resolved by the Minister by a direction in writing.

During the period that an order under paragraph 69(2)(a) is in force, no members of the Board of the co-operative society to which the order relates shall, either directly or indirectly, engage in any business, activities and affairs in relation to the co-operative society, unless it is required or authorized by the Commission or the appointed person and no remuneration of whatever nature shall accrue or be payable to any members of the Board of the co-operative society, unless it is approved in writing by the Commission or the appointed person in relation to any business, activities and affairs required or authorized by the Commission or the appointed person.

An order under paragraph 69(2)(a) shall not have the effect of conferring on, or vesting in, the Commission or the appointed person, any title to, or any beneficial interest in, any property of the co-operative society to which the order relates.

Any officer of the co-operative society who fails to comply with subsection (1) or (3) commits an offence and shall, on conviction, be liable to a fine not exceeding one million ringgit or to imprisonment for a term not exceeding one year or to both and shall, in addition, be liable to a daily fine of one hundred ringgit for each day during which the offence continues after conviction.

Completion of exercise of power under subsections 69(1) and (2)

by the Commission

The Minister may extend the period under subsection (1) for three further consecutive periods not exceeding one year each.

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Upon the expiry of such period referred to in subsection (1) or

, and if in the opinion of the Commission, the Commission has not completed the exercise of its powers under subsection 69(1) or (2), the

Commission may dissolve the co-operative society.

Where the Commission considers that any exercise of the powers referred to in subsection 69(1) or (2) has been completed, the

Commission shall submit any property, business, activities and affairs of the co-operative society to the newly elected Board and cause a notice to that effect specifying the date on which the exercise of such powers was completed to be published in the Gazette.

when the Commission exercises its powers under subsection 69D(3);

upon receipt of an application made by three-fourths of the members of a co-operative society; or

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after an inspection has been made under section 64 or 68 or after an inquiry has been held under section 66.

Any member of a co-operative society may, within a period of two months from the date of an order under subsection (1), appeal from such order to the Minister.

If no appeal is presented to the Minister from an order under subsection (1) within a period of two months from the date of such order, the order shall take effect on the expiry of that period.

If an appeal is presented to the Minister from an order under subsection (1) within a period of two months from the date of such order, the order shall not take effect unless and until it is confirmed by the Minister.

If the Commission makes an order under subsection (1) for the revocation of the registration of a co-operative society, the

Commission may make such further order as the Commission may think fit for the custody of the books and documents and for the protection or disposal of the property of the co-operative society until the order revoking the registration of the co-operative society takes effect under subsection (3) or, if an appeal is presented under subsection (4), until the order is confirmed or otherwise.

No co-operative society shall be dissolved except by an order of the Commission.

Every order made under subsection (1) shall take effect from the date of such order.

determine from time to time the contributions to be made by members and past members or by the estates of deceased members of the co-operative society to its assets;

appoint a day by notice before which creditors whose claims are not already recorded in the books of the co-operative society shall state their claims for admission or be excluded from any distribution made before they have proved them;

decide any question of priority which arises between claimants and draw up a scheme for the payment of their dues;

institute and defend suits and other legal proceedings by and on behalf of the co-operative society by his name or office and to appear in court as a litigant in person on behalf of the co-operative society;

empower any person to make collections and to grant valid receipts on his behalf;

decide by what persons and in what proportions the costs of liquidation are to be borne;

give such directions in regard to the collection and distribution of the assets of the co-operative society and the disposal of the books and documents of the co-operative society as may be necessary in the course of winding up the co-operative society;

compromise any claim by or against the co-operative society provided the sanction of the Commission has first been obtained;

call such general meetings of members or delegates as may be necessary for the proper conduct of the liquidation;

take possession of the books, documents and assets of the co-operative society;

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sell, convey, transfer, assign, exchange, surrender and yield up, lease, mortgage, charge, recover, reassign, or otherwise deal with, all or any part of the properties of the co-operative society, and deal with the proceeds thereof in any manner for the benefit, or in the interest, of the co-operative society or the members, depositors, creditors or customers of, or persons having any lawful dealings or transactions with, the co-operative society;

enter into any arrangement, agreement, or scheme with any person whereby all or part of the properties of the co-operative society are sold, conveyed, transferred, assigned, exchanged, surrendered and yielded up, leased, mortgaged, charged, reassigned, or otherwise disposed of, to any person in consideration of such person agreeing to meet all, or a specified part of, the liabilities of the co-operative society including the deposit liabilities of the co-operative society;

enter into any arrangement, agreement, composition, compromise, or scheme, with any depositors, creditors, customers or persons having any lawful dealings or transactions with the co-operative society whereby any right of any such person, or any liability of the co-operative society to any such person, is made subject to the arrangement, agreement, composition, compromise or scheme entered into by the liquidator;

employ any person as an employee of the co-operative society, or terminate the employment of any employee of the co-operative society, in accordance with the terms of the contract of service, or take such action, including disciplinary action and punishment, as may be deemed necessary, appropriate or expedient in respect of such employment or termination;

carry on the business of the co-operative society so far as may be necessary for winding it up beneficially; and

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arrange for the distribution of the assets of the prescribed co-operative society in a convenient manner when a scheme of distribution has been approved by the

Commission.

Notwithstanding paragraph (1)(o), the liquidator of a prescribed co-operative society is not entitled to issue any loan.

A liquidator may refer any dispute to the Commission, and in relation to such dispute section 82 shall apply as if such dispute were a dispute touching the business of a co-operative society.

A liquidator shall deposit the funds and other assets of a dissolved co-operative society which are collected by him or which come into his possession as liquidator in such manner and in such place as may from time to time be determined by the Commission.

A liquidator shall, every three months, or at such lesser intervals as the Commission may direct, submit to the Commission a report stating the progress made in winding up the affairs of the co-operative society, and shall, on completion of the liquidation proceedings, submit a final report and make over to the Commission all books, registers and accounts belonging to the co-operative society and all books and accounts relating to such proceedings kept by him.

Any liquidator appointed under this Act shall in so far as such powers are necessary for carrying out the purposes of this section, have power to summon and enforce the attendance of parties and witnesses and to compel the production of documents by the same means and (so far as may be) in the same manner as is provided for in the case of a

Sessions Court.

lf the Commission has, pursuant to subsection (4), determined that the funds of a dissolved co-operative society be remitted to it, such funds shall be held by it in a Trust Account to be known as the Co-operative societies Liquidation Account pending their distribution to the beneficiaries in accordance with a scheme to be approved by it.

The funds held in the Co-operative Liquidation Account may be deposited or invested in accordance with the regulations, and the

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net income from such deposit or investment shall be credited to the Co-operative Central Fund which shall be held and administered by the

Commission in accordance with the regulations.

rescind or vary any order made by a liquidator and make whatever new order is required;

remove a liquidator from office;

call for all books, documents and assets of the co-operative society;

by order in writing limit the powers of a liquidator under section 75;

require accounts to be rendered to him by the liquidator;

procure the auditing of the liquidator’s accounts and authorize the distribution of the assets of the co-operative society ; and

make an order for the remuneration of the liquidator, which remuneration shall he included in the costs of liquidation and shall be payable out of the assets in priority to all other claims.

The priority of payment of the unsecured debts of a co-operative society in such liquidation as is referred to in subsection (1)

shall rank in the following order:

When the liquidation of a co-operative society has been closed and any person has not claimed or received what is due to him under the scheme of distribution, notice of the closing of the liquidation shall be published in the Gazette, and all claims against the funds of the co-operative society liquidated shall be proscribed when two years have elapsed from the date of the publication of the notice in the Gazette.

Any balance of the funds remaining after the expiry of the period of two years referred to in subsection (3) shall be credited into the Co-operative Central Fund.

Notwithstanding any other written law, an order under subsection (1) shall be enforced by the Sessions Court having jurisdiction over the place where the registered office of the co-operative society is situated in like manner as a judgment of that Court.

This section shall apply notwithstanding that the act referred to in subsection (1) is one for which the offender may be criminally responsible.

among members, past members and persons claiming through members, past members and deceased members;

between a member, past member, or person claiming through a member, past member or deceased member, and

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the co-operative society, its Board, or any officer of the co-operative society;

between the co-operative society or its Board and any officer of the co-operative society; or

between the co-operative society and any other co-operative society, such dispute shall be referred to the

Commission for decision.

A claim by a co-operative society for any debt or demand due to it from a member, past member or the nominee, heir or legal representative of a deceased member shall be deemed to be a dispute touching the business of the co-operative society within the meaning of subsection (1).

The Commission may, on receipt of a reference under subsection (1)—

Any party aggrieved by the award of the arbitrator or arbitrators may appeal therefrom to the Commission within two months from the date of the award and in such manner as may be prescribed in the regulations.

The decision of the Commission shall be final and shall not be called in question in any civil court.

The award of the arbitrator or arbitrators under subsection (3)

shall, if no appeal is preferred to the Commission under subsection (4)

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or if such appeal is withdrawn or abandoned, be final and shall not be called in question in any civil court.

The decision of the Commission or the award of the arbitrator or arbitrators which, by virtue of subsections (5) and (6), is final shall be enforced by the Sessions Court having jurisdiction over the place where the registered office of the co-operative society is situated in the same manner as if the decision or award had been a judgment of such Sessions Court.

Any party aggrieved by the decision of the court on any dispute referred to it under paragraph (3)(c) may appeal therefrom in accordance with the provisions of the rules of court applicable thereto.

A tribunal established under subsection (1) may hear and determine any dispute within the meaning of subsections 82(1) and (2)

which is referred to it under this section.

The Minister may make such regulations, which are not inconsistent with the provisions of this Act, as may be necessary or expedient for the purpose of enabling the tribunal to carry out its functions, and in particular, without prejudice to the generality of the foregoing power, such regulations may provide for the constitution, officers and proceedings of the tribunal.

Upon the establishment of a tribunal under subsection (1), all disputes within the meaning of subsections 82(1) and (2)—

A tribunal established under subsection (1) may—

The award of a tribunal shall be binding upon the parties.

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Where an award has been made by a tribunal, the Secretary of the tribunal shall on the application of the party seeking to enforce the award send within thirty days from the date of the application a certified copy of the award to the Registrar of the Sessions Court having jurisdiction over the place where the registered office of the co-operative society is situated or over the place where the award was made and such Registrar shall cause the award to be recorded and the award shall thereafter for all purposes be enforceable as a judgement of the Sessions Court in accordance with such rules of the court as may be applicable or, in the absence of such rules, in such manner as it may deem just or expedient.

Notwithstanding the period specified in subparagraph (1)(a) of

Order 31 rule 2 of the Subordinate Courts Rules 1980 [P.U. (A)

328/1980]*, the period specified in that subparagraph shall, in relation to awards made before the coming into operation of subsection (6A), be deemed to run from the date of commencement of that subsection.

Notwithstanding any written law or rule of law to the contrary, the Sessions Court shall have power to enforce any award made by the tribunal.

Any party aggrieved by the award of a tribunal may appeal therefrom to the High Court in accordance with the provisions of the rules of court applicable thereto

Notwithstanding the establishment of a tribunal under subsection (1), the Commission before whom a dispute is pending under paragraph 82(3)(a) or any arbitrator or arbitrators to whom a dispute has been referred under paragraph 82(3)(b) shall continue to deal with such dispute under those paragraphs, and subsections 82(4),

and (7) shall continue to apply to the decision of the Commission or the award of such arbitrator or arbitrators, as the case may be.

Subsections 82(3), (4), (5), (6), (7) and (8) shall not apply to any dispute referred to a tribunal under this section.

* Notes− The Subordinate Courts Rules 1980 [P.U. (A) 328/1980] has been repealed.

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Any reference in this Act to a decision of the Commission or an award of an arbitrator or arbitrators shall, in respect of disputes determined by a tribunal under this section, be construed as a reference to an award of such tribunal.

Any Judge of the High Court, as the Chief Justice may direct, may consider and determine any question of law referred to such High

Court under subsection (1), and the opinion given on such question shall be final and conclusive.

Any co-operative society carrying on business under subsection (1) shall comply with any written directions issued from time to time by the Commission, in consultation with the Syariah

Advisory Council.

For the purpose of this section, “Syariah Advisory Council”

means the Syariah Advisory Council established under subsection 16B(1) of the Central Bank of Malaysia Act 1958 [Act 519].

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amalgamate with another co-operative society or other cooperative societies to form one single co-operative society;

transfer its assets and liabilities to another co-operative society; or

divide itself into two or more co-operative societies, in accordance with the regulations.

The Commission may require the document or information submitted under subsection (1) to be duly certified by the auditor.

Any returns, statistics, documents or information submitted to the Commission under subsection (1) shall be true, accurate and complete.

Where the information obtained by the Commission under subsection (1) relates to the accounts or affairs of the members of the co-operative society, that information shall be regarded as confidential between the Commission and the members of the co-operative society.

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A co-operative society shall disclose information to any credit bureau as may be specified by the Commission.

For the purpose of subsection (5), any information received from a co-operative society by the credit bureau shall be regarded as confidential between the co-operative society and the credit bureau.