1 PART I PRELIMINARY-1. Short title and commencement.

(1) This Act may be cited as the Bank Kerjasama Rakyat Malaysia Berhad (Special Provisions) Act 1978 .

(2) This Act shall come into operation on a date to be appointed by the Minister by notification in the Gazette .

2 PART I PRELIMINARY-2. Interpretation.

(1) In this Act, unless the context otherwise requires-

  "Bank"  means the co-operative society known as the Bank Kerjasama Rakyat Malaysia Berhad;

  "Board"  means the Board of Directors of the Bank established under section 4 and constituted in accordance with paragraph 1 of the First Schedule;

  "Chairman"  means the Chairman of the Bank appointed under paragraph 1(2) of the First Schedule;

  "Commission"  means the Malaysia Co-operative Societies Commission established under the Malaysia Co-operative Societies Commission Act 2007 [Act 665] ;

[Ins. by Act A1362: s.2]

  "director"  means a member of the Board and includes the Chairman and the Managing Director;

3 PART I PRELIMINARY-3. Consequences upon commencement of Act.

Upon the commencement of this Act-

(a) the previous Board shall cease to exercise its powers and discharge its duties and responsibilities in relation to the Bank and shall stand dissolved;

(b) the provisions of this Act shall apply in relation to the Bank;

(c) notwithstanding anything contained in the Co-operative Societies Act 1993, the rules made thereunder, or the by-laws of the Bank, the right of members or shareholders of the Bank to elect or remove directors of the Bank shall cease to be exercisable;

(d) the directors of the Bank holding office immediately before that commencement shall cease to hold any office in the Bank or in any of its subsidiaries;

(e) the executive committee of the Bank appointed under the by-laws of the Bank shall cease to exercise the powers conferred by the by-laws and shall stand dissolved;

(f) in exercisi

4 PART II BOARD OF DIRECTORS AND ADMINISTRATION-4. Board of Directors and its primary responsibility.

(1) For the purposes of this Act, there shall be a Board of Directors of the Bank, constituted in accordance with paragraph 1 of the First Schedule.

(2) The Board shall be responsible for carrying out the functions and powers, and the general administration of the affairs and business, of the Bank.

5 PART II BOARD OF DIRECTORS AND ADMINISTRATION-5. The First Schedule.

(1) The supplementary provisions in the First Schedule shall apply to the Board, the Bank, and the principal officers of the Bank.

(2) The Minister may from time to time by order published in the Gazette amend the First Schedule with regard to-

(a) the number of members of the Board specified in subparagraph 1(1);

(b) the period of appointment of a director specified in subparagraph 2(1);

(c) the frequency of meetings of the Board specified in subparagraph 5(2);

(d) the number of directors specified in subparagraph 5(3), being the number at whose request a meeting of the Board shall be summoned;

(e) the period of notice of meetings of the Board specified in subparagraph 5(4);

(f) the quorum for meetings of the Board specified in subparagraph 5(6).

6 PART II BOARD OF DIRECTORS AND ADMINISTRATION-6. Custody and control of property.

The Board shall take such steps as may be necessary to take into its custody or under its control all property, effects, and actionable claims to which the Bank is or appears to be entitled.

7 PART II BOARD OF DIRECTORS AND ADMINISTRATION-7. Devolution of rights and liabilities.

(1) The Board shall for all purposes be deemed to be the Board of Directors of the Bank duly constituted under the Co-operative Societies Act 1993 and the by-laws of the Bank and shall be entitled to exercise all the powers of the Board of Directors of the Bank, whether such powers are derived from the Co-operative Societies Act 1993, the rules made thereunder, or the by-laws of the Bank; and any reference to the Board of Directors of the Bank in any written law or document shall be deemed to be a reference to the Board.

[Am. by Act A1293: s.2]

(2) Subject to this Act, all powers, rights, privileges, duties, liabilities, and obligations that, immediately before the commencement of this Act, were those of the previous Board shall, as from that commencement, devolve on the Board.

8 PART II BOARD OF DIRECTORS AND ADMINISTRATION-8. Steps for the efficient management of the Bank.

Subject to any directions of the Minister, the Board shall take such steps as may be necessary for the purpose of efficiently managing the business of the Bank.

9 PART II BOARD OF DIRECTORS AND ADMINISTRATION-9. Submission of particulars by previous directors.

(1) The Board may from time to time require any previous director to submit to it, within such time as it may allow, a signed statement of particulars concerning such matters relating to the affairs of the Bank as the Board may specify, including matters relating to-

(a) the assets of the Bank;

(b) the debts and liabilities of the Bank;

(c) the debts and liabilities owing to the Bank;

(d) the creditors and debtors of the Bank.

(2) Any previous director who, without reasonable excuse-

(a) fails, within the time allowed by the Board, to submit to the Board a statement as required by the Board under subsection (1) and signed by him; or

(b) in submitting a statement, fails to set out the particulars in the manner specified by the Board or omits certain particulars required by the Board; or

(c)

10 PART II BOARD OF DIRECTORS AND ADMINISTRATION-10. Power of the Bank to institute proceedings for damages and recovery of property.

(1) The Bank may, if the Board is satisfied that it is necessary in the interest of the Bank or in the public interest so to do, institute such proceedings as it thinks fit for the recovery of damages for any fraud, dishonesty, or other misconduct, in connexion with the management of the affairs of the Bank, committed by any person before the commencement of this Act, or for the recovery of any property of the Bank that has been misapplied or wrongfully retained by any person.

(2) No director shall be personally liable for any costs or expenses incurred in connection with any proceedings instituted by virtue of this section.

(3) The provisions of subsection (1) shall be without prejudice to any other right of the Bank to institute proceedings for any purpose.

11 PART II BOARD OF DIRECTORS AND ADMINISTRATION-11. Termination of service of officers and employees of the Bank.

(1) The Board may, if it is satisfied that it is necessary in the interest of the Bank or in the public interest so to do, terminate the services of any officer or employee of the Bank in accordance with the terms and conditions of his contract of service or for any misconduct, in connection with the management of the affairs of the Bank, committed by the officer or employee before the commencement of this Act.

(2) The provisions of subsection (1) shall be without prejudice to any other right of the Board to terminate the services of the officers and employees of the Bank.

12 PART II BOARD OF DIRECTORS AND ADMINISTRATION-12. Wilful destruction of, or failure to deliver, books registers, and documents of the Bank.

Any person who wilfully destroys, or fails to deliver to the Board when required by the Board, any book of account, register, or other document in his custody relating to the business of the Bank, or retains without authority any property of the Bank, shall be guilty of an offence and shall, on conviction, be liable to a fine not exceeding two thousand ringgit or to imprisonment for a term not exceeding twelve months or to both such fine and imprisonment.

13 PART II BOARD OF DIRECTORS AND ADMINISTRATION-13. Protection in respect of acts done in pursuance of this Act.

No action, suit, prosecution, or other proceeding whatsoever shall lie or be brought or instituted against the Minister, the Minister of Finance, the Government, or any director in respect of any act done or purported to have been done in pursuance or intended pursuance of this Act, the Co-operative Societies Act 1993, the rules made thereunder, or the by-laws of the Bank.

[Am. by Act A1293: s.2]

14 PART III AUTHORIZED BUSINESS AND RESTRICTIONS ON BUSINESS-14. Authorized business of the Bank.

(1) In addition to the powers, functions, duties, and responsibilities conferred or imposed on the Bank by the Co-operative Societies Act 1993, the rules made thereunder, and the by-laws of the Bank, the Bank may-

[Am. by Act A1293: s.2]

(a) make loans to, and stand guarantee for any loan of money to, any person, whether or not a member of the Bank;

(b) grant and issue letters of credit to any person, whether or not a member of the Bank;

(c) acquire, hold, issue on commission, underwrite, and deal with stock, bonds, funds, obligations, securities, and investments of all kinds;

(d) transact all manner of agency business;

(e) acquire and undertake the whole or any part of the business of any person or company carrying on any business of the same nature as the Bank may lawfully carry on, or possessed of property suitable for the

15 PART III AUTHORIZED BUSINESS AND RESTRICTIONS ON BUSINESS-15. Restrictions on payment of dividends and grant of advances and loans to directors.

(1) The Bank shall not-

(a) pay any dividend on its shares until all its capitalized expenditure, including preliminary expenses, organization expenses, share-selling commission, brokerage, amounts of losses incurred, and other items of expenditure not represented by tangible assets, has been completely written off;

(b) grant unsecured advances or unsecured loans in excess of, in the aggregate and outstanding at any one time, ten thousand ringgit to-

(i) any of its directors; or

(ii) any firm or corporation in which any of the directors of the Bank is interested as a partner, director, manager, or agent; or

(iii) any subsidiary of the Bank; or

(iv) any individual, firm, or corporation of whom or of which any of the directors of the Bank is a guarantor;

(c) grant to any of its officers or employees unsecured advances or unsecured lo

16 PART IV SUPERVISION AND CONTROL-16. Directions by Minister.

The Minister may, from time to time, issue directions to the Board or to the managing body of any of the subsidiaries of the Bank with respect to the running of the affairs of the Bank or the subsidiary, including such directions as he considers necessary or expedient for the protection of the interests of the members or depositors of the Bank or subsidiary, and directions for the furnishing to him of such information concerning the affairs of the Bank or subsidiary as he may specify; and the Board or managing body, as the case may be, shall comply with such directions.

17 PART IV SUPERVISION AND CONTROL-17. Inspection of books, etc , and power to investigate into the affairs of the Bank.

(1) The Minister may authorize any person in writing to inspect at any time the books, accounts, papers, securities, and cash in hand of the Bank or any of its subsidiaries; and every officer of the Bank or subsidiary, including every past officer, shall furnish such information and produce such books, accounts, papers, and securities relating to the transactions and working of the Bank or subsidiary as the authorized person may require.

(2) Any officer, including any past officer, of the Bank or subsidiary who fails to comply with any requirement of an authorized person under subsection (1) shall be guilty of an offence and shall, on conviction, be liable to a fine not exceeding five hundred ringgit for every day during which the default continues.

(3) Without prejudice to subsection (1), the Minister may authorize any person in writing to make an investigation, under conditions of secrecy, of the books, accounts, and transactions of t

18 PART IV SUPERVISION AND CONTROL-18. Information to Minister.

(1) The Bank shall, once in every three months, submit to the Minister or to an officer designated by him and to the Minister of Finance or to an officer designated by him a report on the assets and liabilities of the Bank and a statement showing particulars of all advances and loans granted to-

(a) any of its directors, as defined in section 15(4);

(b) any firm or corporation in which any of the directors of the Bank, as defined in section 15(4), is interested as a partner, director, manager, or agent;

(c) any subsidiary of the Bank;

(d) any individual, firm, or corporation of whom or of which any of the directors of the Bank, as defined in subsection 15(4), is a guarantor;

(e) any of its officers or employees in excess of six months' remuneration of the officer or employee; and

(f) any corporation, other than a corporation to which parag

19 PART IV SUPERVISION AND CONTROL-19. Past activities of the Bank.

(1) The Board shall, as soon as may be after the commencement of this Act, submit to the Minister and the Minister of Finance a written report on the activities being undertaken by the Bank immediately before that commencement.

(2) The Minister may, with the concurrence of the Minister of Finance, approve, either unconditionally or subject to such conditions as he thinks fit to impose, all or any of the activities so undertaken by the Bank or may, with the concurrence of the Minister of Finance, direct that all or any of such activities shall cease.

(3) Notwithstanding anything contained in any other written law to the contrary, the activities approved by the Minister under subsection (2) shall be deemed to have been lawfully carried out by the Bank.

20 PART IV SUPERVISION AND CONTROL-20. Subsidiaries of the Bank.

(1) The Board may establish subsidiaries under the Companies Act 1965, but before doing so the Board shall submit its proposal for that purpose to the Minister and the Minister of Finance, and no subsidiary shall be established unless the proposal has been approved by the Minister with the concurrence of the Minister of Finance.

(2) Notwithstanding anything contained in any other written law to the contrary, the subsidiaries established by the Bank before the commencement of this Act shall be deemed to have been lawfully established.

(3) The Minister may, with the concurrence of the Minister of Finance, direct the Bank to wind up any of its subsidiaries established before the commencement of this Act and the directors shall comply with such direction.

(4) Notwithstanding anything contained in any other written law to the contrary, it shall be lawful for the Board to permit in writing any officer or employee of the Bank to hold a

21 PART V THE STATUTORY RESERVE FUND, ACCOUNTS, AND AUDIT-21. Maintenance of the Statutory Reserve Fund.

(1) The Bank shall maintain a Statutory Reserve Fund.

(2) At the end of each financial year, the net profit of the Bank for that year shall be determined after allowing for the expenses of operation and after provision has been made for bad and doubtful debts, depreciation of assets, and contributions to staff and pension funds.

(3) The net profit for the financial year, as determined in accordance with subsection (2), shall be dealt with in the following manner:

(a) where at the end of the financial year the Statutory Reserve Fund is less than fifty per centum of the paid-up capital of the Bank, at least fifty per centum of the net profit shall be credited to the Statutory Reserve Fund;

(b) where at the end of the financial year the Statutory Reserve Fund is fifty per centum or more, but less than one hundred per centum, of the paid-up capital of the Bank, at least twenty-five per centum o

22 PART V THE STATUTORY RESERVE FUND, ACCOUNTS, AND AUDIT-22. Declaration of dividends.

(1) Subject to section 15 (1) (a) and subsection (2) of this section, the Board may from time to time, if in its opinion there are sufficient moneys available for that purpose, declare and pay out dividends on its shares from the net profit, including any profit made in past years.

(2) The Board shall not, unless approved by the Minister with the concurrence of the Minister of Finance, declare and pay out dividends on its shares in excess of ten per centum of the vaIue of the shares.

23 PART V THE STATUTORY RESERVE FUND, ACCOUNTS, AND AUDIT-23. Audit.

(1) The accounts of the Bank shall be audited by the Auditor-General or any other auditor appointed by the Board with the approval of the Minister given with the concurrence of the Minister of Finance.

(2) The duties of the Auditor-General or other auditor shall be to carry out an audit of the accounts of the Bank and to make report on its annual balance-sheet and trading and profit and loss account, including its consolidated balance-sheet and consolidated profit and loss account.

24 PART V THE STATUTORY RESERVE FUND, ACCOUNTS, AND AUDIT-24. Transmission of accounts, balance-sheets, and reports to the Minister and the Minister of Finance.

(1) The Bank shall, within six months from the close of its financial year or within such extended period as the Minister may, with the concurrence of the Minister of Finance, allow, transmit to the Minister and the Minister of Finance a copy of-

(a) the trading and profit and loss account of the Bank for the financial year;

(b) the balance-sheet of the Bank as at the close of the financial year;

(c) a report signed by or on behalf of the Board with respect to the state of affairs of the Bank and its subsidiaries and stating with appropriate details the matters mentioned in section 35A(4) of the Co-operative Societies Act 1993; and

[Am. by Act A1293: s.2]

(d) the auditor's report referred to in section 23(2).

(2) The provisions of the Second Schedule shall apply in relation to subparagraphs (1) (a) and (b)

25 PART VI GENERAL-25. General meetings of the Bank.

The Board may at any time, if it thinks it expedient so to do, and shall, on being directed by the Minister, convene a general meeting of the Bank to carry out the following business, that is to say-

(a) to consider the accounts, balance-sheets, and reports mentioned in subsection 24(1);

(b) to consider any other matter brought by the Board; and

(c) to consider any other matter specified by the Minister.

26 PART VI GENERAL-26. Public servant and public officer.

Every director, officer, and employee of the Bank and of every subsidiary of the Bank shall be deemed to be a public servant within the meaning of the Penal Code [Act 574] and shall be deemed to be a public officer for the purposes of any other written law.

27 PART VI GENERAL-27. Preservation of secrecy.

Except for the purpose of the proper performance of his duties or exercise of his functions, or for the purpose of any legal proceedings in which the Bank is a party, or except where he is lawfully required to do so by any court or under any provision of any law, no director, General Manager, officer, or employee of the Bank shall disclose to any person any information relating to the affairs of the Bank or of any customer of the Bank that he has acquired in the performance of his duties or the exercise of his functions.

28 PART VI GENERAL-28. Regulations.

The Board may, with the approval of the Minister, make regulations, not inconsistent with this Act or the Co-operative Societies Act 1993, for the better carrying out of the objects and purposes of this Act.

[Am. by Act A1293: s.2]

29 PART VI GENERAL-29. Disability as to claims.

No person who was a director, a member of any committee, an officer, or an employee of the Bank before the commencement of this Act shall be entitled to make any claim against the Bank or any other person in respect of any matter arising out of or resulting from the provisions of this Act, or arising out of or resulting from anything done under this Act.

30 PART VI GENERAL-30. Continuance of personal liability.

Nothing in this Act shall be construed as absolving any person who was a director, a member of any committee, an officer, or an employee of the Bank before the commencement of this Act from personal liability for anything arising from his involvement before that commencement in the affairs of the Bank, for which he would be personally liable.

31 PART VI GENERAL-31. Power to terminate operation of Act.

(1) If at any time it appears to the Minister that it is no longer necessary that this Act should remain in force, the Minister may, with the concurrence of the Minister of Finance, direct the Board to call a general meeting of the members of the Bank for the purpose of constituting a Board of Directors under the by-laws of the Bank.

(2) As soon as possible after a Board of Directors has been constituted under the by-laws of the Bank pursuant to subsection (1), the Minister may by order published in the Gazette declare that this Act shall cease to remain in force, and such an order may contain such consequential or transitional provisions as the Minister may deem necessary or expedient.

(3) Subject to subsection (4), on the date when the order under subsection (2) takes effect, the Board shall be divested of the management and administration of the Bank, and such management and administration shall vest in the Board of Directors constit