Malaysia legislation
Section 61
of MALAYSIA DEPOSIT INSURANCE CORPORATION (AMENDMENT) ACT 2016
Section 61
New Chapter 2a of Part VII
Chapter 2 the following chapter:
“Chapter 2a
Provisions relating to compulsory transfer of shares
(a)
“transferor” means a holder of the shares, whose shares are transferred or are to be transferred under paragraph 99(1)(ga);
(b)
“transferee” means a person to whom a transferor’s shares are transferred or are to be transferred under paragraph 99(1)(ga);
(c)
“transfer order” means an order in respect of a transfer of shares referred to in paragraph 99(1)(ga)
and includes a replacement transfer order referred to in section 128d;
(d)
“shares” includes capital instruments, warrants and rights under any other instruments issued by a member institution that entitle the holders thereof to acquire shares in the member institution;
(e)
“transfer date” means the date stated on a transfer order as the date on which any shares are transferred or are deemed to be transferred to the transferee.
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Compulsory transfer of shares 128b. (1) Any transfer of the shares issued by a member institution under paragraph 99(1)(ga) shall be effected by a transfer order issued by the Corporation in accordance with this Chapter.
(2)
Where based on the records of the member institution available to the Corporation in the course of exercise of the compulsory shares transfer power there is a bankrupt transferor, the Corporation shall notify the Director General of Insolvency in writing of the transfer before the transfer is effected and any money or other considerations receivable in relation to the shares of the bankrupt transferor shall vest with the Director General of Insolvency.
(3)
Where the Corporation issues a transfer order under this Chapter, the Corporation shall—
(a)
notify that fact in the Gazette; and
(b)
give a notice of such transfer order as soon as is practicable by publication in at least two daily newspapers published in Malaysia, one of which shall be in the national language.
(4)
The notice under paragraph (3)(b) shall include the matters set out in subparagraph 2a(1) of the First Schedule.
(5)
A transfer order may be in such form as determined by the Corporation from time to time and shall take effect in accordance with this Chapter.
(6)
A transfer order stating that any shares issued by a member institution to be transferred shall be conclusive evidence of such transfer as of the transfer date.
(7)
The transfer order may provide for all or any of the following matters:
(a)
the transfer to the transferee of all or any of the shares issued by the member institution;
Malaysia Deposit Insurance Corporation (Amendment)
(b)
the extinguishment of rights of holders of warrants or other instruments issued by the member institution that entitle the holder to acquire shares in the member institution;
(c)
the removal from the official list of any stock exchange the shares issued by the member institution or a particular class of securities issued by the member institution;
(d)
such incidental, consequential and supplementary matters as are, in the Corporation’s opinion, necessary to secure that the transfer is fully effective, including conditions relating to the transfer.
(8)
The transfer order shall provide for the transfer of any shares issued by the member institution to take effect free from any trust, liability, adverse claim or other encumbrance.
Effect of the transfer order 128c. (1) Where a transfer order is made—
(a)
the transferor shall not be required to notify or obtain the approval of their shareholders or creditor in a general meeting or otherwise, or any governmental, regulatory or other authority whatsoever, or any other person thereby affected notwithstanding any contract, anything in the constituent documents of the transferor or anything in any law including without limitation the Companies Act 1965, the Financial
Services Act 2013 and the Islamic Financial Services
Act 2013;
(b)
the transferee shall not be required to make a take-over offer or be required to acquire the shares of other shareholders of the member institution or the shares of borrowers under any borrowing and lending arrangements for shares, notwithstanding any contract or anything in any law; and
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(c)
subject to subsection (2)—
(i)
no person may terminate or amend any agreement with the member institution or claim an accelerated payment under any such agreement with the member institution by reason only of the making of the transfer order or change in the holders of the shares issued by the member institution;
(ii)
any stipulation in an agreement is of no force or effect if it has the effect of providing for, or permitting, anything that, in substance, is contrary to subparagraph (i); and
(iii)
any stipulation in an agreement is of no force or effect if it provides, in substance, that the member institution ceases to have the rights to use or deal with the assets that the member institution would otherwise have on the making of the transfer order or change in the holders of the shares issued by the member institution.
(2)
The enforcement by the parties of their rights under a qualified financial agreement shall not be affected by the making of a transfer order for the transfer of all or any of the shares issued by the member institutions.
(3)
The Corporation may, with the approval of
Bank Negara Malaysia, in exercising its powers under paragraph 99(1)(ga), by notice in writing—
(a)
remove from office, with effect from such date as may be specified in the notice, any director, officer or employee of the member institution;
(b)
vary or terminate the contract of service of any director, officer or employee of the member institution, as may be specified in the notice; or
(c)
appoint any person as a director, officer or employee of the member institution subject to such terms and conditions as the Corporation may specify.
Malaysia Deposit Insurance Corporation (Amendment)
(4)
Before exercising its powers under subsection (3), the
Corporation shall give the director, officer or employee of such member institution an opportunity to make representation.
(5)
For the avoidance of doubt, where the Corporation exercises its powers under subsection (3), the Corporation, the member institution or the transferee shall not be named as a party in any claim or application made or joined as a party in any proceeding commenced or continued by or on behalf of such director, officer or employee of the member institution pursuant to the Industrial Relations Act 1967 or the Employment Act 1955.
(6)
A transfer order may require or permit—
(a)
a transferor to provide a transferee or the Corporation with information and assistance; or
(b)
a transferee to provide a transferor or the Corporation with information and assistance.
(7)
Any person in complying with the transfer order for the purposes of subsection (6) shall not be treated as being in breach of any law, contract, agreement or arrangement.
(8)
The transfer order issued in accordance with this
Chapter shall be final and binding on all persons to whom the transfer order is made or who are affected by the transfer order regardless that such persons had no notice of any circumstances which led to the making of the transfer order, or had no opportunity to be heard by, or make any representation to, the Corporation regarding the transfer order.
(9)
This Chapter shall have full force and effect notwithstanding—
(a)
anything contained in any law relating to shares and directors, officers and employees of the member institution including the law by or under which the member institution is constituted, established, incorporated or registered; or
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(b)
anything contained in the constituent document of the member institution or in any contract entered into by or on behalf of the member institution or in any contract affecting the shares issued by or otherwise relating to the member institution.
Replacement transfer order 128d. (1) The Corporation may issue a replacement transfer order to replace any transfer order it has previously issued for the purpose of rectifying any omission or error in the transfer order.
(2)
Any replacement transfer order issued by the Corporation under subsection (1) stating that any shares issued by the member institution have been transferred to the transferee shall be conclusive evidence of such transfer as of the transfer date stipulated in the replacement transfer order.
(3)
Any act done by a transferee, transferor or any other person, in reliance of a transfer order previously issued shall not be affected by any omission or error rectified in a replacement transfer order issued under subsection (1).”.
New section 128e