Acquisition
(1) The Corporation may with the consent of the seller—
(a) elect to acquire any asset pursuant to the statutory vesting provisions set forth in this Part, in which case all of the rights and obligations of the Corporation set forth in this Part shall apply and such election shall be conclusively made and evidenced by the Corporation’s issuance of a vesting certificate pursuant to subsection 14(7);
(b) acquire an asset without the benefit of the provisions of this Part, in which case no vesting certificate shall be issued by the Corporation and the Corporation shall acquire and hold such asset pursuant to all provisions of applicable law other than those set forth in this Part.
(2) The seller shall disclose to the Corporation in writing prior to the vesting date all specific claims within his knowledge relating to the asset.
(3) Where a subsidiary of the Corporation prescribed under subsection 60(2) acquires an asset, the provisions of this Part shall apply to that subsidiary as if it were the Corporation itself.
(4) The Corporation shall not acquire any asset of the following persons without the prior written approval of the Securities Commission:
(a) dealers, fund managers, and investment advisers as defined in the Securities Industry Act 1983 [Act 280];
(b) futures broker, futures fund manager, and futures trading adviser as defined in the Futures Industry Act 1993 [Act 499];
(c) stock exchange as defined in the Securities Industry Act 1983;
(d) recognized clearing house and participants of a recognized clearing house as defined in the Securities Industry Act 1983;
(e) exchange company as defined in the Futures Industry Act 1993;
(f) approved clearing house and a futures broker that is an affiliate of a clearing house of an exchange company as defined in the Futures Industry Act 1993;
(g) central depository and its authorized depository agents.
Vesting
(1) The Corporation may acquire any asset, whether such asset is held by the seller alone or jointly with any other person and upon such acquisition such asset shall, on and from the
vesting date, vest in the Corporation either alone or jointly with that other person, as the case may be.
(2) A vesting under subsection (1) shall have effect according to the provisions of this Part and, notwithstanding the provisions of the Civil Law Act 1956 [Act 67] or any other law, shall be binding on any person thereby affected in the manner provided in this Part.
(3) The Corporation shall, on and from the vesting date for an asset, acquire all of the seller’s present and future rights, title and interest in and disclosed obligations with respect to such asset, free of any encumbrance or claim save for any registered interest prevailing as at the vesting date and disclosed claims.
(4) Without prejudice to subsection (1), (2) or (3) in relation to an asset vested in the Corporation—
(a) each obligor with respect to such asset shall be deemed to have released and discharged the seller from the disclosed obligations with respect to such asset;
(b) each obligor and each other person having any right, title or interest in such asset shall be deemed to have consented to and accepted the assumption by the Corporation of all of the disclosed obligations with respect to such asset;
(c) an existing instrument, whether in the form of a deed, will or otherwise, or order of any court, under or by virtue of which the seller has title or ownership of or rights to such asset, shall be construed and shall have effect as if for any reference therein to the seller there were substituted a reference to the Corporation;
(d) an existing agreement in relation to such asset to which the seller was a party shall have effect in so far as it is applicable to the disclosed obligations, disclosed claims and registered interest as if the Corporation had been party thereto instead of the seller;
(e) an existing mandate, power of attorney, authority, undertaking or consent in relation to such asset which was given to the seller, either alone or jointly with another person, shall be deemed to have effect, as if given to the Corporation either alone or jointly with the other person, as the case may be;
(f) a negotiable instrument or order for payment of money in relation to such asset which was given to the seller before the vesting date, shall have the same effect on and from the vesting date, as if it had been given to the Corporation;
(g) where the custody of any goods, things or documents in relation to such asset is held by the seller as bailee immediately before the vesting date, such goods, things or documents shall be deemed to have passed to the Corporation and the rights and disclosed obligations of the seller under any contract of bailment relating to any such asset shall be transferred to the Corporation free of any claim save for disclosed claims;
(h) if such asset is security held immediately before the vesting date by the seller, or by a nominee of or trustee for the seller, as security for the payment or discharge of any liability of any person, such security shall be held by the Corporation or, as the case may be, shall be held by that nominee or trustee as the nominee of, or trustee for, the Corporation with the same priority as the seller, and to the extent of that liability, shall be available to the Corporation as security for the payment or discharge of that liability; and where any such security extends to future advances or future liabilities, shall be held by, and be available as provided for in this paragraph to the Corporation as security for future advances by, and future liabilities to, the Corporation in the same manner in all respects as future advances by, or future liabilities to, the seller were secured thereby immediately before the vesting date;
(i) in addition to any other right, power or remedy granted to the Corporation in this Part, the Corporation shall have the rights, powers and remedies (and in particular the rights and powers as to taking or resisting legal or other proceedings or making or resisting applications to any authority) for ascertaining, protecting or enforcing the rights, titles, interests and disclosed obligations vested in the Corporation including those rights, titles, interests or obligations in respect of any legal or other proceedings or applications to any authority pending immediately before the vesting date by or against the
seller, and resisting any disclosed claims or registered interest as if they had at all times been the rights, titles, interests and obligations of the Corporation;
(j) a judgment or award obtained by the seller in relation to such asset and not fully satisfied before the vesting date shall be enforceable by the Corporation;
(k) no provision in any law or agreement limiting or prohibiting the right of the seller or requiring any consent to assign, sell, dispose or transfer such asset shall have any application or effect in respect of any acquisition or disposition by the Corporation, except that a disposition of such asset by the Corporation shall be subject to the approval of the relevant regulatory body or relevant State Authority having jurisdiction over such disposition;
(l) no acquisition or disposition of such asset by the Corporation shall be void or voidable by reason of the application of any law;
(m) where the interest rate under any agreement in respect of an asset acquired by the Corporation is to be determined by reference to the cost of funds or base lending rate of the seller or is an interest rate that is otherwise no longer determinable as provided in the agreement, the interest rate payable under such agreement shall be—
(i) such interest rate as the Corporation may agree with the obligor of the agreement; or
(ii) determined in the same manner provided in the agreement by reference to the base lending rate of a licensed institution determined by the Central Bank.
(5) Without prejudice to subsection (1), (2), (3) or (4), a vesting of any asset in the Corporation shall not—
(a) be regarded as placing the Corporation, the seller, or any person deriving title from the Corporation or any other person in breach of, or default under, any contract, or in breach of confidence;
(b) be regarded as giving rise to a right for any person to—
(i) terminate or cancel or modify an agreement;
(ii) enforce or accelerate the performance of an obligation; or
(iii) require the performance of an obligation not otherwise arising for performance;
(c) be regarded as placing the seller, the Corporation or any other person in breach of any law or agreement prohibiting, restricting or regulating the assignment, sale, disposition or transfer of any asset or disclosure of information;
(d) release a surety from an obligation;
(e) invalidate or discharge a contract or security;
(f) be regarded as terminating, cancelling or varying any rights, privileges, exemptions (including any tax exemptions) or priorities to which the seller was entitled and which by virtue of this section has vested in the Corporation.
(6) Without prejudice to the generality of subsection (1),
(2), (3), (4) or (5), in any proceeding brought by or against the Corporation in respect of any asset vested in the Corporation pursuant to this section, no person shall raise as a claim or defence to such proceedings any of the following matters, unless such claim is a disclosed claim:
(a) that person has had or would have had a set-off or counterclaim against the seller or any other person;
(b) any person had a prior interest, whether legal or equitable, in the asset;
(c) any person was a party to or privy to any fraud, duress, coercion, undue influence, or misrepresentation;
(d) there was a mistake of law or fact;
(e) any agreement to which the asset relates was in furtherance of an illegal purpose or that any consideration given or received thereunder was unlawful or that the object of the agreement which constitutes or is one of the constituents of the asset is unlawful;
(f) there was a total failure of or no consideration or there was any partial failure of consideration;
(g) the person who executed or is deemed to have executed or who is a party to any document of title for the asset or written contract which evidences, gives rise to or secures the asset did not understand the document;
(h) the person who executed or is deemed to have executed or who is a party to any document of title for the asset or written contract which evidences, gives rise to or secures the asset did not have the capacity or the authority to do the same; and
(i) there is an error in any statement of account issued by the seller or any other person in respect of any debt to which the asset relates.
(7) A vesting certificate executed under the seal of the Corporation stating that an asset has been vested in the Corporation shall be conclusive evidence of such vesting as of the vesting date.
(8) A vesting certificate as specified in subsection (7) may be issued by the Corporation after the vesting date.
Replacement vesting certificate
(1) The Corporation may issue a new vesting certificate to replace any vesting certificate it has previously issued in order to rectify any omission or error in the vesting certificate.
(2) Any replacement vesting certificate issued under subsection
(1) executed under the seal of the Corporation stating that an asset has been vested in the Corporation shall be conclusive evidence of such vesting as of the vesting date specified in the replacement vesting certificate.
(3) If any law stipulates a time period within which a transfer of any of the assets stated to be the subject of a replacement vesting certificate issued under subsection (1) shall be registered or filed, that period shall commence from the date the replacement vesting certificate is issued.
(4) Any act done by the Corporation, seller, Special Administrator or any other person in reliance of a vesting certificate previously issued shall not be affected by any omission or error rectified in a replacement vesting certificate issued under subsection (1).
(5) For the purposes of this Act, a reference to a vesting certificate shall be deemed to include a reference to a replacement vesting certificate issued under subsection (1).
Preservation of rights
(1) A person who is precluded from making a claim against the Corporation or is precluded from raising a defence against the Corporation under section 14, shall be entitled to seek compensation against the seller in respect of such claim.
(2) Where the Court is satisfied that the person referred to in subsection (1) has a claim against the seller including any prior equitable interest in the asset which that person could have raised or claimed but is precluded by section 14, that person shall be entitled to such compensation from the seller in respect of such claim as the Court considers fair and reasonable.
Additional provisions on land
(1) Notwithstanding the provisions of the National Land Code, the Land Ordinance of Sabah, the Land Code of Sarawak or any other law, any caveat or prohibitory order which was registered, endorsed or entered prior to, on or after the vesting date shall not prevent a transfer of any interest in land of the seller to the Corporation.
(2) Where a vesting certificate vests in the Corporation any interest in land—
(a) in Peninsular Malaysia, on receipt of—
(i) payment of the prescribed fee; and
(ii) the applicable form—
(A) with the vesting certificate attached to it; and
(B) showing the identity of the person and particulars of the land affected by the vesting, the Registrar under the National Land Code shall without the need for any further application or filing of any further document make a memorial
on the register document of title and make such other entries and generally do all things as may be necessary to give effect to the vesting;
(b) in Sabah, on receipt of—
(i) payment of the prescribed fee; and
(ii) the applicable form—
(A) with the vesting certificate attached to it; and
(B) showing the identity of the person and particulars of the land affected by the vesting, the Registrar under the Land Ordinance of Sabah shall without the need for any further application or filing of any further document make a memorial on the register document of title and make such other entries and generally do all things as may be necessary to give effect to the vesting;
(c) in Sarawak, on receipt of—
(i) payment of the prescribed fee; and
(ii) the applicable form—
(A) with the vesting certificate attached to it; and
(B) showing the identity of the person and particulars of the land affected by the vesting, the Registrar under the Land Code of Sarawak shall without the need for any further application or filing of any further document make a memorial on the register document of title and make such other entries and generally do all things as may be necessary to give effect to the vesting.
(3) Notwithstanding any provision in the National Land Code, the Land Ordinance of Sabah, the Land Code of Sarawak or any other law, a vesting certificate shall be conclusive evidence of a vesting of an interest in land in the Corporation.
Other Registrars to give effect to vesting certificate
(1) Notwithstanding the provisions of any other law, every Registrar of the High Courts, the Registrar of Companies, the Registrar General of Ships, a central depository, an authorized depository agent, and any person maintaining a register or record of ownership, interest or security, as the case may be, shall, on receipt of—
(a) payment of the prescribed fee; and
(b) the applicable form—
(i) with the vesting certificate attached to it; and
(ii) showing the identity of the person or asset affected by the vesting,
without the need for any further application or filing of any further documents, do all things and make all entries in any register or record kept by that person as may be necessary to give effect to the vesting of the asset to which the vesting certificate relates.
(2) For the purpose of this section, subsection 112a(1) of the Companies Act 1965 shall be deemed to apply to the Corporation as if for the word “thirty” in that subsection the word “ninety” had been substituted.
(3) A Registrar or person who maintains a register or record mentioned in section 16 and this section shall not be liable to any person in respect of the making of any memorial on the register document of title or any other entry in the register or record in reliance on the vesting certificate.
Vesting of asset outside Malaysia
A vesting certificate issued under section 14 may relate to any asset of the seller outside Malaysia and, if it so relates, effect may be given to it either in accordance with any reciprocal arrangements relating to enforcement of judgments that may exist between Malaysia and the country, territory or place outside Malaysia where such asset is located, or where there are no such arrangements, in accordance with the law applicable in such country, territory or place.
Disposition by the Corporation
(1) The Corporation may, in accordance with the provisions of this section, dispose of any of the Corporation’s assets whether vested or not in the Corporation and any property over which the Corporation has a security whether as a chargee, mortgagee, assignee, lienholder or otherwise.
(2) Subject to the approval of the relevant regulatory body and State Authority having jurisdiction over the disposition of an asset by the Corporation, such disposition to any acquiree shall have the effect of an acquisition of an asset by the Corporation as if that acquiree were the Corporation under section 14 and the provisions of sections 15 to 18 shall apply to that acquiree as they apply to the Corporation except that—
(a) a reference to the “seller” shall be construed as a reference to the Corporation;
(b) a reference to the “Corporation” shall be construed as a reference to that acquiree;
(c) a reference to the “vesting certificate” shall be construed as a reference to the transfer certificate; and
(d) a reference to the “vesting date” shall be construed as a reference to the date specified in the transfer certificate as the date of disposition.
(3) A disposition of an asset by the Corporation to an acquiree shall have the effect of transferring the Corporation’s present and future rights, title and interest in and disclosed obligations with respect to such asset, free of any encumbrance or claim save for registered interests prevailing as at the date specified in the transfer certificate as the date of disposition and disclosed claims.
(4) Subject to any requirement for the written approval of the relevant regulatory body or the relevant Satate Authority to transfer, a transfer certificate executed under the seal of the Corporation stating that an asset has been vested in the acquiree shall be conclusive evidence of such transfer as of the date specified in such transfer certificate as the date of disposition.
(5) A transfer certificate as specified in subsection (4) may be issued by the Corporation after the date of disposition.
Replacement transfer certificate
(1) The Corporation may issue a new transfer certificate to replace any transfer certificate it has previously issued in order to rectify any ommission or error in the transfer certificate.
(2) Any replacement transfer certificate issued under subsection
(1) executed under the seal of the Corporation stating that an asset has been transfered to the acquiree shall be conclusive evidence of such transfer as of the date of disposition specified in the replacement transfer certificate.
(3) If any law stipulates a time period within which a transfer of any of the assets stated to be the subject of a replacement transfer certificate issued under subsection (1) shall be registered or filed, that period shall commence from the date the replacement transfer certificate is issued.
(4) Any act done by the Corporation, seller, Special Administrator or any other person in reliance of a transfer certificate previously issued shall not be affected by any omission or error rectified in a replacement transfer certificate issued under subsection (1).
(5) For the purposes of this Act, a reference to a transfer certificate shall be deemed to include a reference to a replacement transfer certificate issued under subsection (1).
Permitted disclosure
(1) Any disclosure by a seller for any purpose and any disclosure by the Corporation for any purpose shall not place the seller, the Corporation or any other person in breach of the provisions of section 97 of the Banking and Financial Institutions Act 1989 or any other law or agreement prohibiting, restricting or regulating the disclosure of information.
(2) Where a seller is a person licensed under the Banking and Financial Institutions Act 1989, such seller shall be deemed to be permitted to disclose information relating to its affairs or the affairs or the account of its customer to the Corporation.
(3) Any information disclosed by a seller or the Corporation under subsection (1) shall not be treated as information made lawfully available to the public for the purposes of subsection 97(2) of the Banking and Financial Institutions Act 1989.
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).
