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In forceUpdated to 1 Dec 2011Read it in Bahasa Malaysia
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Part IV · Trustees of Labuan Trusts

46G. Provisions relating to directors

(1)

The trust instrument may contain rules for determining the manner in which the power of voting and other powers attributable to designated shares should be exercised by the trustee in relation to—

(a)

the appointment of directors of the company;

(b)

the removal of directors;

(c)

the remuneration of directors; or

(d)

any of the matters referred to in subsection (2), and may make provision for those rules to be amended.

(2)

The office of director rules may, in particular—

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(a)

require the trustee to ensure that a particular person holds or retains office as a director;

(b)

require any person to be appointed to the office of director at a future date or upon a future event;

(c)

require the removal of a director in specified circumstances;

(d)

prescribe, subject to the requirements of the memorandum and articles of the company and any written law applicable to the company, the minimum and maximum number of directors to hold office at any time;

(e)

require the trustee, in relation to the appointment and removal of directors, to act generally or in any specified circumstances on the decision of a third person or a committee;

(f)

provide for the conferral of fiduciary duties on a person or a committee referred to in paragraph (e); or

(g)

provide for the establishment, continuance, and procedures of a committee referred to in paragraph (e).

(3)

Subject to subsection (9) and section 46H, the trustee shall at all times use its power of voting and other powers, so far as those powers allow, to ensure—

(a)

that the company has at least the minimum number of directors to meet the requirements of its memorandum and articles and any written law applicable to the company; and

(b)

that, except in an exempted case, the identity of the directors of the company conforms with the office of director rules, if any, for the time being applicable.

(4)

No person becoming or remaining a director of the company, whether in consequence of the office of director rules or otherwise, shall, in the capacity of director, owe fiduciary or other obligations under the trust, or have any fiduciary or other obligations to the

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trustee, but nothing in this subsection shall affect any duty which that person owes, as director, to the company.

(5)

A person for whose appointment the office of director rules may provide include—

(a)

a settlor or protector of the trust; and

(b)

both ascertained and ascertainable persons.

(6)

A trustee shall incur no liability for securing, sanctioning or not opposing the appointment of a director where that appointment is in conformity with the office of director rules.

(7)

Where there is no office of director rules, and in an exempted case, a trustee shall incur no liability for securing, sanctioning, or not opposing, the appointment of a director of the trustee’s own selection, if—

(a)

the trustee concludes in good faith that the appointment in question is consistent with the wishes of the settlor;

and

(b)

the selection is not motivated by a desire on the part of the trustee to reduce business risk, except to the extent, if at all, that the trustee in good faith concludes that a reduction would be consistent with the wishes of the settlor.

(8)

For the purposes of this section, an exempted case is any case in which either—

(a)

the office of director rules make no provision in that case;

or

(b)

the rules make provision but the trustee concludes in good faith that it would be impossible, unlawful, impracticable, or plainly inconsistent with the wishes of the settlor, to ensure compliance with the rules in that case.

(9)

A trustee shall have no duty—

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(a)

to act pursuant to subsection (3) unless and until it receives actual notice that circumstances requiring such action have arisen; or

(b)

to enquire as to whether circumstances requiring action pursuant to subsection (3) exist.

(10)

Where, on any question concerning the appointment of a director, a trustee makes an application to the Court under section 49, the Court, in giving its directions, shall not seek to reduce business risk, except to the extent, if at all, that the Court concludes that a reduction would be consistent with the wishes of the settlor.

Report

Read on from s 46H

Part V

Miscellaneous

Read on from Part V