s 206 Priority of payments in winding up of licensed investment bank carrying on Islamic banking business
(1) For the purposes of this section, “Islamic deposit” has the same meaning assigned to it in subsection 2(1) of the Islamic Financial Services Act 2012. (2) Without prejudice to section 205, in the winding up of a licensed investment bank which has been approved under paragraph 15(1)(a) to carry on Islamic banking business— (a) the assets of the licensed investment bank acquired in the course of its business other than its Islamic banking business, shall be applied to meet the liabilities incurred in the course of its business other than the Islamic banking business, in the order set out in section 205; and (b) where the assets of the licensed investment bank referred to in paragraph (a) is in surplus after payment has been made to meet its liabilities under paragraph (a), such surplus assets of the licensed investment bank shall be applied to meet the liabilities of the licensed investment bank under subsection (3). (3) Without prejudice to section 205, in the winding up of a licensed investment bank— (a) the assets acquired by the licensed investment bank in the course of its Islamic banking business including the Islamic banking funds or any accounts established under subsection 15(3), subject to paragraph (b)— (i) shall not be subject to the debts of the licensed investment bank except in respect of its Islamic banking business or as provided in paragraph (c); and (ii) shall be available to meet all liabilities of that licensed investment bank in respect of its Islamic deposits in Malaysia in priority to all other unsecured liabilities incurred in the course of its Islamic banking business, other than the preferential debts set out in subsection 292(1) of the Companies Act 1965 in the order set out in that subsection and the debts due and claims owing to the Government under section 10 of the Government Proceedings Act 1956, which is attributable to its Islamic banking business as may be specified by the Bank; (b) notwithstanding subsection 292(1) of the Companies Act 1965, but subject to any costs and expenses of the winding up set out in paragraph 292(1)(a) of the Companies Act 1965 directly incurred in realising the assets of the investment accounts and any tax set out in paragraph 292(1)(f) of the Companies Act 1965 which is attributable to the investment accounts, the assets of the investment accounts managed by the licensed investment bank in Malaysia, shall be available, in the order set out as follows: (i) to pay outstanding costs or expenses of the investment accounts; (ii) to pay any profit, fees, gains or other remuneration due to the licensed investment bank; and (iii) to meet the liabilities to the investment account holders; and (c) where the assets of the licensed investment bank referred to in paragraph (a) is in surplus after payment has been made to meet its liabilities under subparagraph (a)(ii), such surplus assets of the licensed investment bank shall be applied to meet the liabilities of the licensed investment bank including the liabilities of the licensed investment bank under section 205 in the order of priority stated therein. (4) For purposes of subparagraph (3)(a)(ii), regulations may be made under section 260 to prescribe the order of priority for payments of different categories of Islamic deposits.