Section 15 — BANK KERJASAMA RAKYAT MALAYSIA BERHAD (SPECIAL PROVISIONS) ACT 1978

(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 other items of expenditure not represented by tangible assets, has been completely written off;

(b)

grant unsecured advances or unsecured loans in excess of, in the aggregate and outstanding at any one time, ten thousand ringgit to—

any of its directors; or any firm or corporation in which any of the directors of the Bank is interested as a partner, director, manager, or agent; or any subsidiary of the Bank; or any individual, firm, or corporation of whom or of which any of the directors of the Bank is a guarantor;

(c)

grant to any of its officers or employees unsecured advances or unsecured loans in excess of, in the aggregate and outstanding at any one time, six months’

remuneration of the officer or employee.

(2)

All the directors of the Bank shall be liable jointly and severally to indemnify the Bank against any loss arising from the making of any unsecured advance or unsecured loan under paragraph (1)(b).

(3)

No secured advance or loan in excess of, in the aggregate and outstanding at any one time, ten thousand ringgit shall be granted

(i)

(ii)

(iii)

(iv)

Bank Kerjasama Rakyat Malaysia Berhad (Special Provision) 17

to any such person, firm, or corporation as is mentioned in paragraph (1)(b) unless the following conditions are satisfied, namely—

(a)

that the borrower meets the standards of credit worthiness required of other borrowers;

(b)

that the terms of the advance or loan are not less favourable to the Bank than those offered to others;

(c)

that the grant of the advance or loan will serve the best interests of the Bank; and

(d)

that the advance or loan has been approved by the votes of not less than two-thirds of the directors of the Bank at a duly convened meeting of the Board, and the approval has been recorded in the minutes of the meeting.

(4)

In paragraph (1)(b), “director” includes the wife, husband, father, mother, son, or daughter of a director.

(5)

In this section, “unsecured advances” and “unsecured loans”

mean respectively advances and loans made without security or, in the case of advances and loans made with security, any portion thereof that at any time exceeds the value of the assets constituting the security.

(6)

Where, in construing subsection (5), a dispute arises as to the value of any asset constituting a security, the value shall be taken to be the market value determined on the basis of a valuation approved by the Minister with the concurrence of the Minister of

Finance.

18 Laws of Malaysia ACT 202