Malaysia legislation
Section 26
Section 26
(a)
pay any dividend on its shares until all its capitalised expenditure (including preliminary expenses, organization expenses, share selling commission, brokerage, amounts of losses incurred and any other item of expenditure not represented by tangible assets) has been completely written off;
(b)
grant an advance, loan or credit facility against the security of its own shares;
(c)
grant unsecured advances, unsecured loans or unsecured credit facilities in excess of, in the aggregate and outstanding at any one time, ten thousand dollars to—
(i)
any of its directors
(ii)
a firm in which it or any of its directors is interested as partner, manager or agent, or to any individual or firm of whom or of which any of its directors is a guarantor;
(iii)
any corporation which is deemed to be related to the bank as described in section 6 of the Companies Act, 1965 other than a licensed bank or a borrowing company licensed under the Borrowing Companies Act, 1969; or
(d)
except in special circumstances as the Central Bank may allow, grant to its officers, employees or other persons being persons receiving remuneration from the licensed bank (other than accountants, advocates and solicitors, architects, estate agents, doctors and any other persons receiving remuneration from a
BANKING bank in respect of their professional services) unsecured advances, unsecured loans or unsecured credit facilities which in the aggregate and outstanding at any one time exceed six months' remuneration of that officer, employee or person.
(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, unsecured loan or unsecured credit facility under subparagraphs (i) and (ii) of paragraph (c) of subsection (1)
(3)
For the purposes of this section—
"director" includes the wife, husband, father, mother, son or daughter of a director;
"unsecured advances", "unsecured loans" and "unsecured credit facilities" mean respectively advances, loans and credit facilities made without security or in respect of any advance, loan and credit facility made with security, any portion thereof which at any time exceeds the market value of the assets constituting the security, or where the Central Bank is satisfied that there is no established market value, the value made on the basis of a valuation approved by the Central Bank.
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