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Labuan Foundations Act 2010 · Updated to 23 Apr 2025 · Part VI · Capacity of Labuan Foundation

54. Disclosure of interest

(1)

Every council member, supervisory person and officer of a

Labuan foundation who is in any way, whether directly or indirectly, interested in a contract or proposed contract with the Labuan foundation shall, as soon as practicable after the relevant facts have come to his knowledge—

(a)

relating to a council member and supervisory person—

(i)

declare the nature of his interest at a council meeting;

(ii)

cause to be circulated in writing to all the other council members particulars of his interest; and

(b)

relating to an officer—

(i)

declare the nature of his interest at a meeting of the officers; or

48 Laws of Malaysia

(ii)

cause to be circulated in writing to all the other officers particulars of his interest.

(2)

Subsection (1) shall not apply in a case where the interest of the council member, supervisory person or officer of a Labuan foundation consists only in him being a member or creditor of another corporation or firm which is interested in a contract or proposed contract with that

Labuan foundation, if that interest may properly be regarded as not being a material interest.

(3)

The declaration of interest by a council member, a supervisory person or an officer shall be made at the following instances —

(a)

in the case of a proposed contract—

(i)

the declaration shall be made at the council meeting or meeting of the officers, as the case may be, at which the proposed contract is first taken into consideration; or

(ii)

the declaration shall be made at the next council meeting or next meeting of officers, as the case may be, held after the council member, supervisory person or officer becomes so interested; and

(b)

in the case of an existing contract, the declaration shall be made at the first council meeting or the first meeting of the officers, as the case may be, held after the council member, supervisory person or officer becomes so interested.

(4)

For the purposes of subsection (1), a general notice is deemed to be given by the interested council member, supervisory person or officer to the other council members or officers, as the case may be, of a Labuan foundation—

(a)

when it is given at a council meeting or meeting of the officers, as the case may be; or

Labuan Foundations 49

(b)

where the council member, supervisory person or officer takes reasonable steps to ensure it is brought up and read at the next council meeting or meeting of the officers, as the case may be.

(5)

Every council member, supervisory person or officer of a

Labuan foundation who holds any office or possesses any property whereby, whether directly or indirectly, duties or interests might be created in conflict with his duties or interests as a council member, a supervisory person or an officer of the Labuan foundation, shall declare at a council meeting or meeting of the officers of the Labuan foundation or cause to be circulated in writing to the other council members or officers the fact and the nature, character and extent of the conflict.

(6)

Nothing in this section shall be taken to prejudice the operation of any provision in the constituent document of a Labuan foundation restricting a council member, a supervisory person or an officer of a

Labuan foundation from having any interest in contracts with the

Labuan foundation.

Terms defined in s 2

constituent document
Defined · s 2
“constituent document” means the charter and the articles, of a Labuan foundation;
Open s 2
corporation
Defined · s 2
“corporation” means any body corporate, formed or incorporated, or existing within or without Malaysia and includes any foreign Labuan company but does not include— (a) any corporation sole; (b) any trade union registered under any written law as a trade union; and (c) any society registered under any written law relating to co-operative societies;
Open s 2
Labuan
Defined · s 2
“Labuan” means the Federal Territory of Labuan;
Open s 2
Malaysia
Defined · s 2
“Malaysia” means the territories of the Federation of Malaysia, the territorial waters of Malaysia and the sea-bed and subsoil of the territorial waters, and includes any area extending beyond the limits of the territorial waters of Malaysia, and the sea-bed and subsoil of any such area, which has been or may hereafter be designated under the laws of Malaysia and in accordance with international law as an area over which Malaysia has sovereign rights for the purposes of exploring and exploiting the natural resources, whether living or non living;
Open s 2
officer
Defined · s 2
“officer” means the officer of a Labuan foundation appointed in accordance with section 35;
Open s 2
property
Defined · s 2
“property” includes— (a) assets of every kind, whether corporeal or incorporeal, movable or immovable, tangible or intangible, however acquired; and (b) legal documents or instruments in any form, including electronic or digital, evidencing title to or interest in, such assets as described in paragraph (a), including bank cheques, money orders, shares, securities, bonds, bank drafts and letters of credit;
Open s 2
supervisory person
Defined · s 2
“supervisory person” means any person or body of persons having supervisory powers over the Labuan foundation and is appointed under the charter of the Labuan foundation;
Open s 2

Report

Read on from s 55

Part VII

Beneficiaries

Read on from Part VII

Part VIII

Dissolution

Read on from Part VIII

Part IX

General Provisions

Read on from Part IX

54. Disclosure of interest

Terms defined in s 2

Beneficiaries

Dissolution

General Provisions

Schedules