The Bank under Minister’s supervision
The Bank shall be under the general supervision of the Minister and, subject to the provisions of this Act, the Minister may, from time to time, give directions of a general character not inconsistent with the provisions of this Act as to the performance of the functions or duties and the exercise of the powers of the Bank.
Examination of the Bank
The Minister may, from time to time, examine, without any prior notice, the books or other documents, accounts, and transactions of the Bank and its offices within and outside Malaysia.
Power of Minister to direct examination to be made
The Minister may at any time direct any person to make an examination of the books or other documents, accounts and transactions of the Bank and its offices within and outside Malaysia if he suspects that the Bank is carrying on its business in a manner which is, or which is likely to be, detrimental to the interests of its depositors or creditors, or has insufficient assets to cover its liabilities to the public, or is contravening any provision of this Act or any other written law.
Production of Bank’s books, etc.
(1) For the purpose of an examination under section 45 or 46, the Bank and its directors and officers shall afford any person carrying out the examination access to all its books or other documents and accounts, including documents of title to its assets, all securities held by it in respect of its customers’ transactions, all its cash, and all such documents, information and facilities as may be required by that person for the purpose of the examination, and shall produce to that person all such books or other documents, accounts, titles, securities or cash, and give all such information, as he may require: Provided that, so far as it is consistent with the conduct of the examination, such books or documents, accounts, titles, securities and cash shall not be required to be produced at such times or at such places as may interfere with the proper conduct of the normal daily business of the Bank. (2) Notwithstanding anything in subsection (1), any person authorized by the Minister in writing for this purpose may take possession of any books or other documents, accounts, titles, securities or cash to which he has access under subsection (1) where in his opinion— (a) the inspection of them, the copying of them, or the making of extracts from them, cannot reasonably be undertaken without taking possession of them; (b) they may be interfered with or destroyed unless he takes possession of them; or (c) they may be needed as evidence in any legal proceedings, whether civil or criminal, which may be instituted under or in connection with this Act or any other written law. (3) Where the Bank fails to comply with subsection (1), it shall not exceeding three million ringgit and, in the case of a continuing offence, to a further fine not exceeding three thousand ringgit for each day during which the offence continues after conviction. (4) Where the Bank is guilty of an offence under subsection (3), any person who at the time of the commission of the offence was a person responsible for the Bank shall also be guilty of that offence and shall on conviction be liable to a fine not exceeding three million ringgit or to imprisonment for a term not exceeding three years or to both and, in the case of a continuing offence, to a further fine not exceeding three thousand ringgit for each day during which the offence continues after conviction.
Bank unable to meet obligations to inform the Minister
(1) In the event the Bank is insolvent, or is likely to become unable to meet all or any of its obligations, or that it is about to suspend payment to any extent, the Bank shall immediately inform the Minister of that fact. (2) Where the Bank fails to comply with subsection (1), it shall not exceeding three million ringgit and, in the case of a continuing offence, to a further fine not exceeding three thousand ringgit for each day during which the offence continues after conviction. (3) Where the Bank is guilty of an offence under subsection (2), any person who at the time of the commission of the offence was a person responsible for the Bank shall also be guilty of that offence and shall on conviction be liable to a fine not exceeding three million ringgit or to imprisonment for a term not exceeding five years or to both and, in the case of a continuing offence, to a further fine not exceeding three thousand ringgit for each day during which the offence continues after conviction.
Action by the Minister in respect of the Bank in certain circumstances
(1) Where— (a) the Bank informs the Minister— (i) that it is insolvent; (ii) that it is likely to become unable to meet all or any of its obligations; or (iii) that it is about to suspend payment to any extent; or (b) whether after an examination is made under section 45 or 46 or otherwise, the Minister is satisfied that the Bank— (i) is carrying on its business in a manner detrimental to the interest of its depositors, or its creditors, or the public generally; (ii) is insolvent, or has become or is likely to become unable to meet all or any of its obligations, or is about to suspend payment to any extent; or (iii) has contravened any provision of this Act or any provision of any written law, regardless that there has been no criminal prosecution in respect thereof, the Minister may, by order in writing, exercise any one or more of the following powers, as he deems necessary: (aa) require the Bank to take any steps, or any action, or to do or not to do any act or thing, in relation to the Bank, or its business, or its directors or officers, which the Minister may consider necessary and which he sets out in the order, within such time as may be set out therein; (bb) prohibit the Bank from extending any further credit facility for such period as may be set out in the order and make the prohibition subject to such exceptions, and impose such conditions in relation to the exceptions, as may be set out in the order, and, from time to time, by further order similarly made, extend the aforesaid period; (cc) notwithstanding anything in any written law, or any limitations contained in the constituent documents of the Bank, for reasons to be recorded by him in writing, remove from office, with effect from such date as may be set out in the order, any officer of the Bank; (dd) notwithstanding anything in any written law, or any limitations contained in the constituent documents of the Bank, and, in particular, notwithstanding any limitation therein as to the minimum or maximum number of directors, for reasons to be recorded by him in writing— (i) remove from office, with effect from such date as may be set out in the order, any director of the Bank; or (ii) appoint any person or persons as a director or directors of the Bank, and provide in the order for the person or persons so appointed to be paid by the Bank such remuneration as may be set out in the order; or (ee) appoint a person to advise the Bank in relation to the proper conduct of its business, and provide in the order for the person so appointed to be paid by the Bank such remuneration as may be set out in the order. (2) Where any of the circumstances set out in paragraphs (1)(a) and (1)(b) exist in respect of the Bank, the Minister may, whether or not he had exercised any of his powers under paragraph (1)(aa), (1)(bb), (1)(cc), (1)(dd), or (1)(ee)— (a) assume control of the whole of the property, business and affairs of the Bank, or assume control of such part of its property, business and affairs, or by order published in the Gazette appoint any person to do so on his behalf; (b) appoint any person to carry on the whole or any part of the business and affairs of the Bank for which control has been assumed by the Minister; (c) apply, or authorize any person by order published in the Gazette to apply, to the High Court to appoint a receiver or manager to manage the whole of the business, affairs and property of the Bank, or such part thereof as may be set out in the order, and for all such incidental, ancillary or consequential orders or directions of the High Court in relation to such appointment as may, in the opinion of the Minister, be necessary or expedient; or (d) present, or authorize any person by order published in the Gazette to present, a petition to the High Court for the winding up of the Bank. (3) The costs and expenses incurred in relation to the assumption of control under paragraph (2)(a) or the remuneration of the person appointed under that paragraph or paragraph (2)(b), as the case may be, shall be payable out of the funds and properties of the Bank as a first charge thereon. (4) An order of the Minister under subsection (1) or (2), may, from time to time, be modified, amended, altered, varied or replaced either prospectively, or where it is not impracticable or unjust to do so, retrospectively, by a further order under subsection (1) or (2), as the case may be. (5) No order under subsection (1) or (2), or by virtue of subsection (4), shall be made unless the Bank, and in the case of an order under paragraph (1)(cc) or subparagraph (1)(dd)(i), also the officer or director who is to be removed from office, has been given a reasonable opportunity of making representations against, or otherwise in respect of, the proposed order: Provided that if in the opinion of the Minister, in the case of an order to be made by the Minister under subsection (1) or (2), or by virtue of subsection (4), any delay would be detrimental to the interests of the Bank, or its depositors or creditors, or the public generally, the order may be made first and the opportunity to make representations against or otherwise in relation to the order shall, in such case, be given immediately after the order has been made, and the order may, in consequence of such representations either be confirmed, or be modified, amended, altered, varied or replaced under subsection (4), or be revoked under subsection (6), subject to such conditions, if any, as the Minister thinks fit to impose. (6) An order of the Minister made under subsection (1), or by virtue of subsection (4), may at any time be revoked by an order similarly made by the Minister and any such order may contain all such orders, directions or provisions of an incidental, ancillary, or consequential nature, as may be deemed necessary or expedient by the Minister. (7) Where the Bank fails to comply with— (a) paragraph (1)(aa) or (1)(bb), it shall be guilty of an offence and shall on conviction be liable to a fine not exceeding ten million ringgit and, in the case of a continuing offence, to a further fine not exceeding ten thousand ringgit for each day during which the offence continues after conviction; (b) subparagraph (1)(dd)(ii) or paragraph (1)(ee), it shall be guilty of an offence and shall on conviction be liable to a fine not exceeding one million ringgit and, in the case of a continuing offence, to a further fine not exceeding one thousand ringgit for each day during which the offence continues after conviction. (8) Where the Bank is guilty of an offence under paragraph (1)(aa) or (1)(bb), any person who at the time of the commission of the offence was a person responsible for the Bank shall also be guilty of that offence and shall on conviction be liable to a fine not exceeding ten million ringgit or to imprisonment for a term not exceeding ten years or to both and, in the case of a continuing offence, to a further fine not exceeding ten thousand ringgit for each day during which the offence continues after conviction. (9) Any person who contravenes subsection (5) or (6) shall be guilty of an offence and shall on conviction be liable to a fine not exceeding ten million ringgit or to imprisonment for a term not exceeding ten years or to both and, in the case of a continuing offence, to a further fine not exceeding ten thousand ringgit for each day during which the offence continues after conviction.
Provisions in relation to an appointment under section 49
(1) A person appointed by the Minister under subparagraph 49(1)(dd)(ii), paragraph 49(1)(ee), or paragraph 49(2)(a) or (b) shall be appointed for such period as may be determined by the Minister, not exceeding, in any case, two years, but may be reappointed for three further consecutive periods not exceeding one year each, and shall, during such period of appointment or reappointment, hold his appointment at the pleasure of the Minister. (2) The terms and conditions of an appointment referred to in subsection (1), shall, subject to the order under which the appointment is made, and to subsection (1), be determined by the Minister and shall be binding on the Bank. (3) The appointment of a director or directors under subparagraph 49(1)(dd)(ii) shall not affect any provision of the constituent documents enabling the Bank to have further directors where the maximum number of directors allowed under the constituent documents has not already been reached or exceeded by the appointment or appointments under subparagraph 49(1)(dd)(ii). (4) A person holding any appointment as referred to in subsection (1) shall not incur any obligation or liability solely by reason of his holding such appointment. (5) Where a receiver or manager has been appointed in respect of the Bank by the High Court under paragraph 49(2)(c), all proper costs, charges and expenses, including the remuneration, of such receiver or manager shall be payable out of the assets of the Bank in priority to all other claims. (6) Where the Bank fails to comply with subparagraph 49(1)(dd)(ii) or paragraph 49(1)(ee), it shall be guilty of an offence and shall on conviction be liable to a fine not exceeding one million ringgit and, in the case of a continuing offence, to a further fine not exceeding one thousand ringgit for each day during which the offence continues after conviction.
Provisions in relation to removal from office under paragraph 49(1)(cc) or subparagraph 49(1)(dd)(i)
(1) Any officer or director removed from office in the Bank under paragraph 49(1)(cc) or subparagraph 49(1)(dd)(i) shall cease to hold the office from which he is removed with effect from the date set out in the order, and shall not thereafter hold any other office in the Bank or, in any manner, whether directly or indirectly, be concerned with, or take part, or engage in, any activity, affairs or business of or in relation to the Bank. (2) The removal of an officer or director under paragraph 49(1)(cc) or subparagraph 49(1)(dd)(i) shall be lawful and valid notwithstanding anything contained in any contract of service or other contract or agreement, whether express or implied, whether individual or collective, and whether or not made or provided for under any written law, and a person so removed from office shall not be entitled to claim any compensation for the loss or termination of office. (3) Any person who contravenes subsection (1) shall be guilty of an offence and shall on conviction be liable to a fine not exceeding three million ringgit or to imprisonment for a term not exceeding three years or to both and, in the case of a continuing offence, to a further fine not exceeding three thousand ringgit for each day during which the offence continues after conviction.
Provisions relating to assumption of control under paragraph 49(2)(a)
(1) Where control of the Bank has been assumed by the Minister or by a person appointed by the Minister (hereinafter in this Part referred to as the “appointed person”) under paragraph 49(2)(a), the Bank and its directors and officers shall submit its property, business and affairs to such control, and shall provide the Minister or the appointed person or the person appointed under paragraph 49(2)(b) all such facilities as may be required to carry on the business and affairs of the Bank. (2) Where control of the Bank has been assumed by the Minister or by the appointed person by order made under paragraph 49(2)(a)— (a) the Minister shall remain in control of the property, business and affairs of the Bank, and any person appointed by him under paragraph 49(2)(b) shall carry on such business and affairs in the name and on behalf of the Bank until such time as the appointment is revoked; (b) the appointed person shall remain in control of the property, business and affairs of the Bank and shall carry on the business and affairs of the Bank in the name and on behalf of the Bank as provided in the order appointing him until such time as the order is revoked under subsection 49(6). (3) Throughout the period of control of the Bank under paragraph 49(2)(a), there shall be vested in the Minister, or in the appointed person, as the case may be, all the powers of the Bank, and of its directors, under the constituent documents of the Bank, or exercisable by the Bank or its directors under any written law, or otherwise, regardless whether such powers are exercisable by the resolution, special resolution, or in any other manner, and any difficulty arising in relation thereto may be resolved by the Minister by a direction in writing. (4) During the period of control by the Minister or the appointed person, as the case may be, under paragraph 49(2)(a), no director of the Bank shall, either directly or indirectly, engage in any activity in relation to the Bank, except as may be required or authorized by the Minister, or the appointed person, as the case may be, and no remuneration of whatever nature shall accrue or be payable to any director of the Bank, except such as may be approved in writing by the Minister, or the appointed person, as the case may be, in relation to any activity required as aforesaid by the Minister, or the appointed person, as the case may be. (5) For the avoidance of doubt, it is hereby declared that the assumption of control under paragraph 49(2)(a) shall not have the effect of conferring on, or vesting in, the Minister, or the appointed person, as the case may be, any title to, or any beneficial interest in, any property of the Bank to which the order relates. (6) Any person who contravenes subsection (1) or (4) shall be guilty of an offence and shall on conviction be liable to a fine not exceeding five million ringgit or to imprisonment for a term not exceeding five years or to both and, in the case of a continuing offence, to a further fine not exceeding five thousand ringgit for each day during which the offence continues after conviction.
Power to reduce share capital and to cancel shares of the Bank when subject to an order under paragraph 49(2)(a)
(1) Notwithstanding anything in any written law or the constituent documents of the Bank, where the Minister, or an appointed person, has, under paragraph 49(2)(a), assumed control of the Bank and the paid-up capital of the Bank is lost or unrepresented by available assets, the Minister or the appointed person, as the case may be, may apply to the High Court for an order to reduce the share capital of the Bank by cancelling any portion of its paidup capital which is lost or unrepresented by available assets. (2) Where the High Court makes an order under subsection (1) to reduce the share capital of the Bank, the Court may— (a) on an application by the Minister, or the appointed person, as the case may be; and (b) if, on the expiry of thirty days from the date of any call made by the Bank on its members to pay on their respective shares, payment on any shares has not been made, also order that such shares for which payment has not been made be cancelled accordingly. (3) Where the share capital of the Bank is reduced pursuant to subsection (1), or any of its shares is cancelled pursuant to subsection (2), the Minister, or the appointed person, as the case may be, may cause the constituent documents to be altered accordingly. (4) The powers conferred on the Minister and the appointed person under subsections (1), (2) and (3) shall be in addition to any powers exercisable under subsection 64(1) of the Companies Act 1965, and where an application is made to the High Court under subsection (1)— (a) the High Court may exercise any of the powers conferred on it under section 64 of the Companies Act 1965 in relation to an application for confirmation referred to therein; and (b) subsections 64(9) and 64(10) of the Companies Act 1965 shall apply in relation thereto.
Loans to the Bank and acquisition of its shares
(1) Where the Minister considers that the Bank— (a) is likely to become unable to meet all or any of its obligations; or (b) is about to suspend payment to any extent, the Minister may— (aa) grant loans to the Bank against the security of the Bank’s own shares, or any other shares, or any other sufficient security; (bb) purchase any shares of the Bank for the purpose of controlling the business of the Bank; or (cc) grant loans to a licensed institution to purchase any shares, or the whole or any part of the properties and liabilities of the Bank. (2) The Minister, or the licensed institution to which the Minister granted loans to under paragraph (1)(cc), shall dispose of any shares purchased by it in pursuance of subsection (1) at such time when the Minister is satisfied that the reasons for which the shares were purchased have ceased to exist.
Extension of jurisdiction under this Part to related companies of the Bank
Any reference in this Part to the Bank shall be read as including a reference to— (a) any related corporation of the Bank; and (b) a person controlled by a director or directors of the Bank, or by persons acting in concert with a director or directors of the Bank.
Moratorium
(1) The Minister may, if he considers it to be in the interest of the depositors of the Bank, by order published in the Gazette— (a) prohibit the Bank from carrying on all its business, or such part of it as may be set out in the order; (b) prohibit the Bank from doing or performing any act or function connected with all its business or any part of it as may be set out in the order; (c) authorize any person to apply to the High Court for an order staying for a period not exceeding six months the commencement or continuance of all, or any class, category or description of, actions and proceedings of a civil nature by or against the Bank with respect to all business, or any class, category or description of business, of the Bank; or (d) provide for all such matters of an incidental, ancillary or consequential nature, or for which it may be otherwise necessary or expedient to provide, in order to give effect to the matters under paragraphs (a), (b) and (c), including provisions for the taking into the custody or control of the Minister of property, books, documents or effects of the Bank. (2) An order under subsection (1) may, from time to time, be modified, amended, altered, varied or replaced either prospectively, or where it is not impracticable or unjust to do so, retrospectively, by a further order under subsection (1). (3) An order under subsection (1) shall not be made unless the Bank has been given a reasonable opportunity of making representations against, or in relation to, the proposed order, provided that where any delay would be detrimental to the interests of the depositors, the order may be made first, and the opportunity to make representations shall be given immediately after the order has been made, and in consequence of such representations, the order may, either be confirmed, or be modified, amended, varied, altered or replaced under subsection (2), or be revoked under subsection (4), by the Minister. (4) An order made under subsection (1), or by virtue of subsection (2), may at any time be revoked by the Minister by an order, and any such order may contain all such orders, directions or provisions of an incidental, ancillary or consequential nature as may be deemed necessary by the Minister.
Priority of payments in the event of insolvency of the Bank
(1) Where the Bank becomes unable to meet all or any of its obligations, or suspends payment to any extent, the properties of the Bank in Malaysia shall be available to meet all liabilities of the Bank in respect of deposits in Malaysia in priority over all other liabilities of the Bank in Malaysia. (2) In determining the total liabilities of the Bank to a person under subsection (1), no account shall be taken in respect of a deposit if it was made with the Bank, or received by the Bank, in contravention of this Act after the appointed date, or if it was otherwise unlawfully made or received whether before or after the appointed date. (3) In determining the total liabilities of the Bank to a person under subsection (1), there shall be deducted any right of set-off which existed immediately before the provisions of subsection (1) became applicable to it. (4) The provisions of this section shall have effect notwithstanding anything inconsistent therewith or contrary thereto in any written law other than this Act, or in any rule of law.
Provisions on this page are reproduced verbatim from official open data. See the attribution line.
Text as at 1 January 2006 (LOM reprint); amendments made after that date may not be incorporated. Read the official text ↗
Source: Laws of Malaysia, Attorney General's Chambers of Malaysia (lom.agc.gov.my). Not a copy of the Gazette printed by the Government Printer (Interpretation Acts 1948 and 1967, s 61).