Malaysia legislation
Section 39
Section 39
(a)
where the transaction has been approved by a special resolution of the company, and the directors have certified to the meeting, in writing, to the effect that there are no reasonable grounds for believing that—
(i)
the company is, or would after giving the financial assistance be, insolvent; or
(ii)
the realizable value of the company’s assets, excluding the amount of any financial assistance in the form of a loan and in the form of assets pledged or encumbered to secure a guarantee, would, after giving the financial assistance or loan, be less than the aggregate of the company’s liabilities and stated capital; or
(b)
to employees (other than an employee who is also a director ) of the company or of any of its subsidiaries or of its holding company.
(2)
A Langkawi company may purchase, take, receive or otherwise acquire, hold, own, pledge, transfer or otherwise dispose of its own shares, or the shares of any of its subsidiaries or of its holding company, but the purchases thereof, whether direct or indirect, shall be made only to the extent of unreserved and unrestricted earned surplus available therefor; and if the articles of
46
Act 643
association so provide, or with the affirmative votes of the holders of at least three-fourths of all shares entitled to vote thereon, to the extent of unreserved and unrestricted capital surplus available therefor.
(3)
Notwithstanding subsection (2), provided that there are no reasonable grounds for believing that the company is, or would after the payment be, insolvent or that the realizable value of the company’s assets would, after the payment, be less than the aggregate of its liabilities and stated capital, a Langkawi company may purchase or otherwise acquire its own shares for the purposes of—
(a)
eliminating fractional shares;
(b)
paying dissenting shareholders entitled to payment for their shares under the provisions of this Act or the regulations; or
(c)
effecting, subject to this Act, the retirement of its redeemable shares by redemption or by purchase at a price not exceeding the redemption price.
Cancellation of reacquired shares by a Langkawi company