DEVELOPMENT FINANCIAL INSTITUTIONS ACT 2002
(1) This Act may be cited as the Development Financial Institutions Act 2001.
(2) This Act comes into operation on a date to be appointed by the Minister by notification in the Gazette.
[Note: In force from 15 February 2002 - PU(B) 51/2002]
(1) This Act shall apply to such development financial institutions as may be prescribed by the Minister by order published in the Gazette.
(2) For the avoidance of doubt, the Minister may, by order published in the Gazette , on the recommendation of the Bank, provide that all or any part of the provisions of this Act shall not apply in respect of any development financial institution, or shall apply with such modifications as may be set out in the order and such modifications must be consistent with the intent and purpose of this Act.
(1) In this Act, unless the context otherwise requires:
"child" includes an illegitimate child, a step-child and a child adopted under any written law of Malaysia or of any place outside Malaysia, or under any custom recognised by a class of persons in or outside Malaysia;
"member", in relation to an institution which is:
(a) a corporation, means a shareholder; and
(b) a partnership, means a partner;
"statutory body" means any authority or body, whether corporate or unincorporate, established, appointed or constituted by any written law, but does not include any local authority;
"Bank" means the Central Bank of Malaysia established under the Central Bank of Malaysia Act 1958 [Act 519];
"related" , in relation to a co
4 PART I PRELIMINARY-4. Functions of the Bank.
(1) The Bank shall have all the functions conferred on it by this Act and the Governor shall perform the functions of the Bank on its behalf.
(2) The Bank may authorize a Deputy Governor or any of its officers to perform any of its functions under this Act.
[(2) Am. Act A1502:s.4]
(2A) The Bank may establish and authorize a committee consisting of members as the Bank may determine to perform any or all of its functions under this Act on behalf of and in the name of the Bank.
[(2A) Ins. Act A1502:s.4]
(3) The Bank may, either generally or in a particular case, appoint a person who is not an officer of the Bank to perform any or all of its functions on behalf of and in the name of the Bank or render such assistance in the performance of its functions under this Act as the Bank may specify.
[(3) Am. Act A1502:s.4]
5 PART II MANAGEMENT, OWNERSHIP AND CONTROL-5. Board of directors.
The board of directors of a prescribed institution shall be responsible for carrying out the policy and general administration of the affairs and business of the prescribed institution in accordance with this Act.
6 PART II MANAGEMENT, OWNERSHIP AND CONTROL-6. Appointment of Chief Executive Officer and directors.
(1) A prescribed institution shall appoint a Chief Executive Officer and directors for an initial term not exceeding two years and the Chief Executive Officer or directors shall, subject to the constituent documents of the prescribed institution, be eligible for annual reappointment.
(2) Notwithstanding subsection (1), a prescribed institution shall, prior to the appointment of any person as its Chief Executive Officer or director, seek the Bank's verification on whether such a person satisfies the criteria set out in the Schedule.
(3) Any prescribed institution that contravenes subsection (1) or (2) commits 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.
(4) A prescribed institution shall notify the Bank of the appointment of its
7 PART II MANAGEMENT, OWNERSHIP AND CONTROL-7. Disqualification of Chief Executive Officer and director.
(1) No prescribed institution shall appoint a person and no person shall accept appointment as a Chief Executive Officer or director of a prescribed institution:
(a) if he is a bankrupt or has compounded with his creditors, whether in or outside Malaysia;
(b) without prejudice to paragraph (c), if a charge for a criminal offence relating to dishonesty, fraud or violence under any written law punishable with imprisonment for one year or more, whether by itself, or in lieu of, or in addition to, a fine, has been proved against him in any court in or outside Malaysia;
(c) if a charge for any offence under this Act has been proved against him;;
(d) if there has been made against him any order of detention, supervision, restricted residence, banishment or deportation, or if there has been imposed on him any form of restriction or supervision, by bond or otherwise, under any law
8 PART II MANAGEMENT, OWNERSHIP AND CONTROL-8. Cessation of office.
[Shoulder note. Subs. Act A1502:s.10]
(1) Where:
(a) a Chief Executive Officer or director of a prescribed institution becomes disqualified by virtue of subsection 7(1); or
(b) a chairman, director, Chief Executive Officer or senior officer of a prescribed institution no longer complies with any of the criteria set out in the First Schedule,
he shall immediately cease to hold office and cease to act in such capacity.
[(1) Subs. Act A1502:s.10]
(1A) The prescribed institution shall immediately:
(a) in the case of paragraph (1)(a), terminate the appointment of such Chief Executive Officer or director; or
(b) in the case of paragraph (1)(b), remove the chairman, director, Chief Executive Officer or senior officer from such office.
[(
9 PART II MANAGEMENT, OWNERSHIP AND CONTROL-9. Exemption from disqualification.
(1) A person who is disqualified by virtue of paragraph 7(l) (e) may, with the written consent of the prescribed institution in which he is holding office or is to be appointed, apply to the Bank in writing to exempt him from that paragraph, and, the Bank may, with the concurrence of the Minister, grant such exemption, subject to such conditions as the Bank considers fit to impose.
(2) The person applying for an exemption under subsection (1) and the prescribed institution in which he is holding office or is to be appointed shall submit such particulars and information as the Bank may specify.
10 PART II MANAGEMENT, OWNERSHIP AND CONTROL-10. Notice of cessation of office.
(1) A prescribed institution shall notify the Bank in writing of the fact that a person has ceased to be its chairman, director, Chief Executive Officer or senior officer and the reasons for it within fourteen days from the date of the cessation.
[(1) Am. Act A1502:s.11]
(2) (Deleted by Act A1502:s.11)
11 PART II MANAGEMENT, OWNERSHIP AND CONTROL-11. Disclosure of interest.
(1) A director of a prescribed institution who has an interest, directly or indirectly, in a transaction or arrangement with the prescribed institution, or in any matter being or about to be considered by the prescribed institution, shall, as soon as practicable, disclose to the board of directors of the prescribed institution the nature and extent of his interest.
[(1) Subs. Act A1502:s.12]
(2) (Deleted by Act A1502:s.12)
(3) The secretary to the board shall record in the board's minutes the disclosure referred to in subsection (1).
(4) (Deleted by Act A1502:s.12)
(5) Whether or not a disclosure under subsection (1) has been made, the director shall, in relation to that transaction, arrangement or matter:
[(5) Am. Act A1502:s.12]
(a) refrain from taking part or from being present in any deliberation or decision
12 PART II MANAGEMENT, OWNERSHIP AND CONTROL-12. Acquisition of interest in shares.
(1) Unless the Minister otherwise approves, no person shall acquire, together with any interests in the shares of a prescribed institution which are already held by him, or by him and by persons acting in concert with him, an aggregate interest in shares of five per cent or more of the shares of that prescribed institution, or such other percentage as the Minister may prescribe.
(2) No person who has obtained an approval of the Minister under subsection (1) shall acquire any further interest in the shares of such prescribed institution without obtaining the approval of the Minister and subsection (1) shall apply to an application for approval under this subsection.
(3) Any person who contravenes subsection (1) or (2) commits an offence and shall on conviction be liable to imprisonment for a term not exceeding ten years or to a fine not exceeding fifty million ringgit or to both.
[(3) Subs. Act A1502:s.13] <
13 PART II MANAGEMENT, OWNERSHIP AND CONTROL-13. Report of acquisition to the Bank.
(1) Where it comes to the knowledge of a prescribed institution that any acquisition as is referred to in subsection 12(1) has been effected or is about to be effected in respect of itself, the prescribed institution shall report it to the Bank within thirty days from the date the prescribed institution becomes aware of such acquisition.
(2) (Deleted by Act A1502:s.14)
14 PART II MANAGEMENT, OWNERSHIP AND CONTROL-14. Change in control, amalgamation and merger.
(1) Unless the Minister otherwise approves, no person shall:
(a) subject to subsection 12(1), take control of a prescribed institution or its holding company; or
(b) amalgamate or merge with any prescribed institution.
(2) Any person who contravenes subsection (1) commits an offence and shall on conviction be liable to imprisonment for a term not exceeding ten years or to a fine not exceeding fifty million ringgit or to both.
[(2) Subs. Act A1502:s.15]
15 PART II MANAGEMENT, OWNERSHIP AND CONTROL-15. Transfer of business.
(1) Unless the Minister otherwise approves, a prescribed institution shall not sell, dispose of, or transfer the whole or any part of its business, including all property derived from, or used in or for the purpose of such business.
(2) Any prescribed institution that contravenes subsection (1) commits an offence and shall on conviction be liable to imprisonment for a term not exceeding ten years or to a fine not exceeding fifty million ringgit or to both.
[(2) Subs. Act A1502:s.16]
16 PART II MANAGEMENT, OWNERSHIP AND CONTROL-16. Application to High Court for transfer of business.
(1) A prescribed institution transferring its business under paragraph 14(l)(b) or subsection 15(1) to another person may make a joint application to the High Court by way of an ex parte originating summons for all or any of the following orders:
(a) the date on and from which the transfer shall take effect, being a date earlier or later than the date of the application;
(b) the vesting of any property held by the prescribed institution, either alone or jointly with any other person, in the other person either alone or, as the case may be, jointly with any other person, on and from the transfer date, in the same capacity, upon the trusts, and with and subject to the powers, provisions and liabilities, respectively;
(c) for any existing instrument, whether in the form of a deed, will or otherwise, or order of any court, under or by virtue of which any property became vested in the
17 PART II MANAGEMENT, OWNERSHIP AND CONTROL-17. Transfer of immovable property.
Where an order of the High Court under subsection 16(2) vests any alienated land or any share or interest in any alienated land in an other person:
(a) the High Court shall, where such alienated land is in Peninsular Malaysia, pursuant to subsection 420(2) of the National Land Code [Act 56/1965] , cause a copy of the order to be served on the Registrar of Titles or the Land Administrator, as the case may be, immediately after the making of the order so that the Registrar of Titles or the Land Administrator, as the case may be, gives effect to the provisions of subsections 420(2), (3) and (4) of the Code;
(b) where such alienated land is in Sabah, the transferee shall, as soon as practicable after the order has been made, present an authenticated copy of such order to the Registrar for the registration of the vesting of the alienated land or of the share or interest in alienated land as provided und
18 PART II MANAGEMENT, OWNERSHIP AND CONTROL-18. Own shares or shares of holding company as collateral.
(1) Unless the Bank otherwise approves in writing, no person shall grant a financing facility to any person against the collateral of the shares or property of a prescribed institution or its holding company if the shares or property to be provided as collateral for the proposed financing facility, by itself, or together with any other shares or property of that prescribed institution already held as collateral for any other financing facilities given by him, would constitute five per cent or more of the shares or property of that prescribed institution or its holding company.
[(1) Gen. Am. Act A1502:s.2]
(2) Unless the Bank otherwise approves, no prescribed institution shall grant any financing facility, or enter into any other transaction, against the collateral of its own shares or property or the shares or property of its holding company.
[(2) Gen. Am. Act A1502:s.2]
(3)
19 PART II MANAGEMENT, OWNERSHIP AND CONTROL-19. Application to the Bank.
(1) Any application for the Minister's approval under subsection 12(1), 14(1) or 15(1) shall be made to the Bank together with such information and documents as the Bank may specify.
(2) Where any information or document required by the Bank is not provided within the time specified or any extended time granted by the Bank, the application shall, without prejudice to a fresh application being made, be deemed to be withdrawn.
(3) The Bank shall consider the application under subsection (1) and make a recommendation to the Minister whether the application should be approved or refused.
(4) A recommendation to approve an application shall not be made if the Bank is satisfied that it would be contrary to the public interest to do so.
(5) Upon receiving an application and the recommendation of the Bank under this section, the Minister may approve the application with or without any modification or condition, or refuse the app
20 PART II MANAGEMENT, OWNERSHIP AND CONTROL-20. Defence relating to contravention.
It shall be a defence to a charge for an offence relating to contraventions under section 12, 13, 14, 15 or 18 for the accused to prove that he had no knowledge of the acts, omissions, facts or circumstances constituting the contravention, provided he had reported the contravention to the Bank within seven days of becoming aware of those acts, omissions, facts or circumstances which constituted such contravention.
21 PART II MANAGEMENT, OWNERSHIP AND CONTROL-21. Effect of contravention.
(1) Where the Bank is satisfied that any person has contravened subsection 12(1) regardless as to whether or not there is any prosecution of any person for such contravention, the Bank may make a preliminary order in writing:
(a) prohibiting the transfer of, or the carrying out of the agreement to transfer, such shares or, in the case of unissued shares, prohibiting the transfer of, or the carrying out of the agreement to transfer, the right to be issued with them;
(b) prohibiting the exercise of any voting rights in respect of such shares;
(c) prohibiting the issue of any further shares in right of such shares or in pursuance of any offer made to their holder; or
(d) except in a liquidation, prohibiting the payment of any sums due from the prescribed institution on such shares, whether in respect of capital or otherwise.
(2) Any person who fails to c
22 PART II MANAGEMENT, OWNERSHIP AND CONTROL-22. Preliminary order by the Bank.
(1) A preliminary order under section 21 shall be served on the defaulting person as soon as is practicable, and may be publicised in such manner as the Bank deems fit, if, in the opinion of the Bank, it needs to be publicised.
(2) A preliminary order shall be binding on:
(a) the defaulting person;
(b) any person for the time being holding any shares to which such order applies; and
(c) any other person specified in the order or to whom the order is directed.
(3) Any person holding any shares to which a preliminary order applies shall within seven days after its service on the defaulting person, or such longer period as the Bank may allow, surrender such shares to the Bank.
(4) Any person who contravenes subsection (3) commits an offence and shall on conviction be liable to imprisonment for a term not exceeding one year or to a fine not exceeding five
23 PART II MANAGEMENT, OWNERSHIP AND CONTROL-23. Confirmation of preliminary order.
(1) The Bank may, after considering the representations made under subsection 22(5), either confirm the preliminary order, or revoke it, or vary it in such manner as it deems fit.
(2) Where the Bank confirms a preliminary order, it may dispose of the shares surrendered to it under subsection 22(3) to such person and to such extent as the Bank may determine.
(3) The proceeds of the disposal of the shares under subsection (2) shall be paid into the High Court, and any person claiming to be beneficially entitled to the whole or any part of such proceeds may, within thirty days of such payment into the High Court, apply to a judge of the High Court in chambers for payment out of the proceeds to him.
24 PART II MANAGEMENT, OWNERSHIP AND CONTROL-24. Direction to give effect to order.
(1) The Bank may direct the directors or officers of the prescribed institution to give effect to a preliminary order of the Bank under subsection 22(1) or an order of the Bank confirmed under subsection 23(1), or to take such action as may be incidental, ancillary or consequential to such order.
(2) Any person who fails to comply with the direction under subsection (1) commits an offence and shall on conviction be liable to imprisonment for a term not exceeding one year or to a fine not exceeding five million ringgit or to both.
[(2) Subs. Act A1502:s.22]25 PART III RESTRICTIONS ON BUSINESS-25. Control of establishment or acquisition of subsidiaries or acquisition or holding of material interest in corporations.
[Shoulder note. Am. Act A1502:s.23]
(1) Unless the Bank otherwise approves in writing, no prescribed institution shall establish or acquire any subsidiary in or outside Malaysia, or acquire or hold any material interest in any corporation.
[(1) Am. Act A1502:s.23]
(2) (Deleted by Act A1502:s.23)
(3) The Bank may approve an application to establish or acquire a subsidiary, or acquire or hold any material interest in any corporation, under subsection (1), with or without conditions, or reject the application.
[(3) Am. Act A1502:s.23]
(4) Every prescribed institution shall at all times comply with any condition as may be specified by the Bank under subsection (3).
[(4) Subs. Act A1502:s.23]
(5) The Bank may specify what constitutes "material interest" for the purposes of subsection (1) and par
26 PART III RESTRICTIONS ON BUSINESS-26. Direction in respect of subsidiary or material interest in corporations.
[Shoulder note. Am. Act A1502:s.24]
(1) Notwithstanding any approval under subsection 25(1), the Bank may, in the interest of a prescribed institution, direct the prescribed institution to:
(a) rationalise the business of any of its subsidiaries;
(b) transfer the business of any of its subsidiaries to another corporation, including the prescribed institution or any of its other subsidiaries;
[(b) Am. Act A1502:s.24]
(c) wind up any of its subsidiaries; or
[(c) Am. Act A1502:s.24]
(d) dispose of all or any of its interest in its subsidiary or corporation in which it holds a material interest.
[(d) Ins. Act A1502:s.24]
(1A) In determining the interest of a prescribed institution under subsection (1), the Bank shall take into consid
27 PART III RESTRICTIONS ON BUSINESS-27. Restriction or prohibition of business.
(1) Except with the prior written approval of the Bank, a prescribed institution shall not carry on, whether on its own account or on a commission basis, and whether alone or with others, any activity in or outside Malaysia, otherwise than in connection with or for the purposes of carrying on its business.
(2) (Deleted by Act A1502:s.25)
(3) The Bank may, in the interest of promoting orderly development in any economic sector:
(a) prohibit or restrict a prescribed institution from carrying on such description of business as it may specify; or
(b) direct a prescribed institution to carry on such description of business as it may specify.
(4) (Deleted by Act A1502:s.25)
28 PART III RESTRICTIONS ON BUSINESS-28. Prohibition of financing facilities.
[Shoulder note Gen. Am. Act A1502:s.2]
(1) No prescribed institution shall grant to any person any financing facility, whether from its own funds or any trust fund it manages under section 43, except for such purposes or on such collateral as the Bank may specify.
[(1) Gen. Am. Act A1502:s.2]
(2) (Deleted by Act A1502:s.26)
(3) Unless otherwise specified by the Bank, no prescribed institution shall grant any financing facility to:
[(3) Gen. Am. Act A1502:s.2; Am. Act A1502:s.26]
(a) any of its members, directors or officers or any other person receiving remuneration from it (other than any person receiving remuneration from it in respect of his professional services);
[(a) Am. Act A1502:s.26]
(b) any body corporate or unincorporate, or any sole proprietorship,
29 PART III RESTRICTIONS ON BUSINESS-29. Single counterparty exposure limit.
[Shoulder note. Subs. Act A1502:s.27]
(1) Subject to subsection 28(1) and except as may be approved by the Minister on the recommendation of the Bank, no prescribed institution shall have an exposure to a single counterparty, whether in relation to its own funds or any trust fund it manages under section 43, which exceeds the limit as may be specified by the Bank.
[(1) Subs. Act A1502:s.27]
(1A) An exposure to a single counterparty referred to in subsection (1) shall include an exposure to any group of persons connected to such single counterparty but shall not include any exposure to, and any exposure explicitly guaranteed by, the Bank or the Government.
[(1A) Ins. Act A1502:s.27]
(1B) For the purposes of this section, the Bank may specify what constitutes "connected", "counterparty" or "exposure".
[(1B) Ins. Act A1502
30 PART III RESTRICTIONS ON BUSINESS-30. Restriction on giving of financing facility.
[Shoulder note Gen. Am. Act A1502:s.2]
(1) A prescribed institution may, whether from its own funds or any trust fund it manages under section 43, and notwithstanding paragraph 28(3)(a), grant a financing facility to the spouse, child or parent of any of its directors or officers for the purchase of a house if:
[(2) Gen. Am. Act A1502:s.2]
(a) the person to whom the financing facility is given has creditworthiness which is not less than that normally required by the prescribed institution of other persons to whom financing facilities are given;
[(a) Gen. Am. Act A1502:s.2]
(b) the terms of the financing facility are not less favourable to the prescribed institution than those normally offered to other persons;
[(b) Gen. Am. Act A1502:s.2]
(c) the giving of the financi
31 PART III RESTRICTIONS ON BUSINESS-31. Disclosure of director's interest.
(1) Every director of a prescribed institution who has in any manner, whether directly or indirectly, any interest in a proposed financing facility, whether from its own funds or from any trust fund it manages under section 43, to be given to any person by such prescribed institution shall as soon as practicable declare in writing the nature of his interest to a duly constituted meeting of directors, and the secretary of the prescribed institution, or other officer appointed by the prescribed institution for the purpose, shall cause a copy of such declaration to be circulated immediately to every director regardless whether he was present or not at such meeting.
[(1) Gen. Am. Act A1502:s.2]
(2) (Deleted by Act A1502:s.28)
(3) For the purposes of subsection (1), a general notice in writing served on each director of the prescribed institution by a director to the effect that he is a director, offic
32 PART III RESTRICTIONS ON BUSINESS-32. Control of credit limit.
(1) A director or officer of a prescribed institution shall not grant any financing facility in excess of the limit, or outside the scope of any terms and conditions, imposed on him by the prescribed institution, or in contravention of any directions given to him, or any agreement made with him, by the prescribed institution.
[(1) Gen. Am. Act A1502:s.2]
(2) (Deleted by Act A1502:s.29)
(3) Subsection (1) applies to the funds of the prescribed institution and any trust fund it manages under section 43.
(4) The Bank may by written notice direct a prescribed institution to:
(a) submit any information relating to its policy and procedure for the granting of any financing facility;
[(a) Gen. Am. Act A1502:s.2]
(b) submit a report on the limit or the terms and conditions imposed, the directions given, and the agreement
33 PART III RESTRICTIONS ON BUSINESS-33. Investment of assets.
(1) Subject to subsection (2), a prescribed institution shall invest any of its assets in such manner, and maintain the assets in such place, as the Bank, with the approval of the Minister, may specify.
(2) The Bank may direct a prescribed institution in writing:
(a) not to make investment of a specified class or description; or
(b) to realise, before the expiry of a specified period or such extended period as the Bank may approve, the whole or a specified proportion of its investment.
(3) (Deleted by Act A1502:s.30)
33A Division 1 Interpretation-33A. Interpretation and application.
(1) For the purposes of this Part:
"investment account" has the same meaning as in the Islamic Financial Services Act 2013 [ Act 759 ];
"Islamic deposit" has the same meaning as in the Islamic Financial Services Act 2013;
"Islamic financial business" means the business or activity in accordance with Shariah which a prescribed institution is approved to carry on under paragraph 33B(1) (a) or (b) , which may include-
(a) accepting Islamic deposits on current account, deposit account, savings account or other similar accounts, with or without the business of paying or collecting cheques drawn by or paid in by customers; and
(b) accepting money under an investment account.
(2) In Division 2 to Division 4 of this Part, "prescribed institution" refers to a prescribed institution which has obtained an approval of the Bank under subs
33B Division 1 Interpretation-33B. Prescribed institution permitted to carry on business or activity in accordance with Shariah.
(1) Nothing in this Act or the Islamic Financial Services Act 2013 shall prohibit or restrict any prescribed institution from:
(a) carrying on its entire business or activity in accordance with Shariah; or
(b) carrying on business or activity in accordance with Shariah in addition to its existing conventional business,
provided that the prescribed institution obtains the prior written approval of the Bank.
(2) The Bank may impose any condition on the approval granted by the Bank under subsection (1).
(3) A prescribed institution which has obtained an approval of the Bank under paragraph (1) (b) shall not carry on its entire business or activity in accordance with Shariah unless such prescribed institution obtains the prior written approval of the Bank under paragraph (1) (a) .
(4) Any prescribed institution that contravenes subsection (1) or (3)
33C Division 1 Interpretation-33C. Requirement on prescribed institution approved under paragraph 33b(1)(b).
(1) A prescribed institution which has obtained the approval of the Bank under paragraph 33B(1) (b) shall:
(a) establish and maintain at all times a fund with such minimum amount as may be specified by the Bank to fund the operations of its Islamic financial business; and
(b) keep all assets and liabilities of its Islamic financial business separate from its other assets and liabilities in such manner as may be specified by the Bank.
(2) The fund established under paragraph (1) (a) shall:
(a) be funded from the capital funds of the prescribed institution and other sources of funds as may be specified by the Bank; and
(b) be segregated from the capital funds of the prescribed institution for the operations of its business or activity other than the Islamic financial business.
(3) Unless otherwise speci
33D Division 2 Shariah compliance-33D. Duty to ensure compliance with Shariah.
(1) A prescribed institution shall at all times ensure that its business, affairs and activities are in compliance with Shariah.
(2) For the purposes of subsection (1), a compliance with any advice or ruling of the Shariah Advisory Council in respect of any particular business, affair or activity shall be deemed to be a compliance with Shariah in respect of that business, affair or activity.
(3) Where a prescribed institution becomes aware that it is carrying on any of its business, affair or activity in a manner which is not in compliance with Shariah or the advice of its Shariah committee or the advice or ruling of the Shariah Advisory Council, the prescribed institution shall:
(a) immediately notify the Bank and its Shariah committee of the fact;
(b) immediately cease from carrying on such business, affair or activity and from taking on any other similar business, affair or activity; and
33E Division 2 Shariah compliance-33E. Power of the Bank to specify standards on Shariah matters.
(1) The Bank may, in accordance with the advice or ruling of the Shariah Advisory Council, specify standards:
(a) on Shariah matters in respect of the carrying on of business, affair or activity by a prescribed institution which requires the ascertainment of Islamic law by the Shariah Advisory Council; and
(b) to give effect to the advice or rulings of the Shariah Advisory Council.
(2) In addition, the Bank may also specify standards relating to any of the following matters which do not require the ascertainment of Islamic law:
(a) Shariah governance including:
(i) functions and duties of the board of directors, senior officers and members of the Shariah committee of a prescribed institution in relation to compliance with Shariah;
(ii) fit and proper requirements or disqualifications of a member of a Shariah committee; and
33F Division 3 Shariah governance-33F. Establishment of Shariah committee.
A prescribed institution shall establish a Shariah committee for the purpose of advising the prescribed institution in ensuring its business, affairs and activities comply with Shariah.
[33F. Ins. Act A1502:s.31]
33G Division 3 Shariah governance-33G. Appointment of Shariah committee member.
No person shall be appointed, reappointed or accept any appointment as a member of a Shariah committee unless such person meets the requirements as set out in any standards as may be specified by the Bank under subparagraph 33E(2) (a) (ii) and has obtained the prior written approval of the Bank.
[33G. Ins. Act A1502:s.31]
33H Division 3 Shariah governance-33H. Functions and duties of Shariah committee and its members.
A Shariah committee and every member of the Shariah committee shall have such functions and duties set out in any standards as may be specified by the Bank under subparagraph 33E(2) (a) (i).
[33H. Ins. Act A1502:s.31]
33I Division 3 Shariah governance-33I. Cessation as member of Shariah committee.
(1) A member of a Shariah committee shall cease to be a member if:
(a) such member resigns as a member;
(b) the prescribed institution, subject to subsection (3), terminates the appointment of such member;
(c) such member is disqualified pursuant to any standards specified by the Bank under subparagraph 33E(2) (a) (ii); or
(d) such member no longer meets the fit and proper requirements as may be specified by the Bank under subparagraph 33E(2) (a) (ii) to the satisfaction of the Bank.
(2) A member of a Shariah committee who:
(a) resigns as a member; or
(b) becomes aware that he is disqualified pursuant to any standards specified by the Bank under subparagraph 33E(2) (a) (ii) and as such, pursuant to paragraph (1) (c) , ceases to be a member,
shall notify th
33J Division 3 Shariah governance-33J. Cessation as member of Shariah committee.
(1) Where a person ceases to be a member of a Shariah committee of a prescribed institution pursuant to:
(a) paragraph 33I(1) (a) , (b) or (d) ; or
(b) paragraph 33I(1) (c) , if such disqualification is within the prescribed institution's knowledge,
the prescribed institution shall notify the Bank in writing of that fact and the reasons of such cessation immediately or in any case not later than fourteen days from the date of such cessation.
(2) Where a person ceases to be a member of a Shariah committee under subsection 33I(1) or is removed by the Bank under subsection 33I(4), the prescribed institution shall appoint a new member of its Shariah committee in accordance with section 33G within such period as may be specified by the Bank.
[33J. Ins. Act A1502:s.31]
33K Division 3 Shariah governance-33K. Information to be provided to Shariah committee.
(1) A prescribed institution and any director, officer or controller of such institution shall:
(a) provide any document or information within its or his knowledge, or capable of being obtained by it or him, which the Shariah committee may require; and
(b) ensure that such document or information provided under paragraph (a) is accurate, complete, not false or misleading in any material particular,
to enable the Shariah committee to carry out its functions and duties under this Act.
(2) Except as provided in section 33l, a member of a Shariah committee shall not disclose any document or information provided under subsection (1) to any other person.
[33K. Ins. Act A1502:s.31]
33L Division 3 Shariah governance-33L. Qualified privilege and duty of confidentiality.
A member of a Shariah committee shall not be liable:
(a) for a breach of a duty of confidentiality between such member and the prescribed institution in respect of:
(i) any reporting to the Bank; or
(ii) the carrying out of his functions and duties,
pursuant to any standards specified by the Bank under subsection 33E(2) which was done or made in good faith; or
(b) to be sued in any court for defamation in respect of any statement made by the member without malice in the carrying out of his functions and duties under this Act.
[33L. Ins. Act A1502:s.31]
33M Division 4 Audit on Shariah compliance-33M. Appointment of person by prescribed institution to conduct audit on Shariah compliance.
(1) The Bank may require a prescribed institution to appoint any person as the Bank may approve, to carry out an audit on Shariah compliance by the prescribed institution.
(2) The person appointed under subsection (1) shall have such functions and duties as may be specified by the Bank and shall submit a report to the Bank on the audit carried out pursuant to this section.
(3) The remuneration and expenses of the person appointed under subsection (1) shall be borne by the prescribed institution.
(4) A person appointed under subsection (1) shall not be liable for a breach of duty of confidentiality between such person and the prescribed institution in respect of matters reported to the Bank pursuant to an audit on Shariah compliance under this section.
[33M. Ins. Act A1502:s.31]
33N Division 4 Audit on Shariah compliance-33N. Appointment of person by Bank to conduct audit on Shariah compliance.
(1) Without prejudice to section 33M, the Bank may appoint for a prescribed institution any person to conduct an audit on Shariah compliance:
(a) if the prescribed institution fails to appoint a person under subsection 33M(1);
(b) in addition to the person appointed under subsection 33M(1); or
(c) under any other circumstances as the Bank deems appropriate for the purposes of compliance with Shariah by the prescribed institution,
and the remuneration and expenses relating to such appointment shall be borne by the prescribed institution.
(2) The person appointed under subsection (1) shall have such functions and duties as may be specified by the Bank and shall submit a report to the Bank on the audit carried out pursuant to this section.
(3) The person appointed under subsection (1) shall not be liable for a breach of duty of confidentiality between suc
34 PART IV OBLIGATIONS AND SOURCING OF FUNDS-34. Statement of corporate intent.
(1) A prescribed institution shall, for each financial year, submit to the Bank within such period as the Bank may specify, such statement of corporate intent as may be approved by the Minister charged with the responsibility for that prescribed institution.
(2) The statement of corporate intent under subsection (1) shall be in such form as the Bank may specify and shall include the prescribed institution's strategic plans and manner of sourcing for funds for the following financial year.
(3) (Deleted by Act A1502:s.32)
(4) (Deleted by Act A1502:s.32)
(5) (Deleted by Act A1502:s.32)
(6) (Deleted by Act A1502:s.32)
35 PART IV OBLIGATIONS AND SOURCING OF FUNDS-35. Annual funding.
(1) A prescribed institution shall, for each financial year, submit to the Bank, within such period and in such form as the Bank may specify, an annual funding requirement as may be approved by the Minister.
[(1) Subs. Act A1502:s.33]
(2) (Deleted by Act A1502:s.33)
(3) (Deleted by Act A1502:s.33)
(4) Notwithstanding subsection (1), a prescribed institution shall submit to the Bank any additional funding requirement for its own account, an existing trust fund or a new trust fund as may be approved by the Minister.
[(4) Subs. Act A1502:s.33]
(5) (Deleted by Act A1502:s.33 )
(6) (Deleted by Act A1502:s.33)
36 PART IV OBLIGATIONS AND SOURCING OF FUNDS-36. Restrictions on payment of dividend.
(1) A prescribed institution shall not pay any dividend on its shares until all its capitalised expenditure (including preliminary expenses, organisation expenses, shares selling commission, brokerage, amount of losses incurred, and any other item of expenditure not represented by tangible assets) has been written off.
(2) Before a prescribed institution declares any dividend, it shall apply in writing for the approval of the Bank in respect of the amount proposed to be declared, and the Bank may approve such amount, or a reduced amount, or prohibit payment of any dividend, having regard to the financial condition of the prescribed institution.
(3) (Deleted by Act A1502:s.34)
37 PART IV OBLIGATIONS AND SOURCING OF FUNDS-37. Maintenance of liquid assets.
(1) The Bank may specify that a prescribed institution shall hold such minimum, or minimum average, amount of liquid assets in Malaysia as may be set out in the specification at all times or for such period, and in such ratio or formula.
(2) (Deleted by Act A1502:s.35)
(3) For the purpose of subsection (1), the minimum, or minimum average, amount of liquid assets shall be expressed as a percentage of all or such of its liabilities incurred by its offices in Malaysia as may be set out in the specification.
(4) For the purpose of subsection (1), the Bank shall specify a period of not less than seven days within which a prescribed institution shall comply with the specification.
(5) (Deleted by Act A1502:s.35)
(6) The Bank may prohibit any prescribed institution from giving any financing facilities to any person during the period in which the prescribed institution has failed to comply with any requirement of a spec
38 PART IV OBLIGATIONS AND SOURCING OF FUNDS-38. Maintenance of capital funds.
(1) The Bank may require a prescribed institution to maintain capital funds, unimpaired by losses, in such ratio to all or any of its assets or to all or any of its liabilities, including those of all its offices in and outside Malaysia, as the Bank may specify.
(2) (Deleted by Act A1502:s.36)
39 PART IV OBLIGATIONS AND SOURCING OF FUNDS-39. Maintenance of reserve fund.
(1) The Bank may require a prescribed institution to:
(a) maintain a reserve fund; and
(b) before declaring any dividend from its net profits of each year (after due provision made for taxation),transfer to its reserve fund out of the net profits of each year:
(i) a sum equal to not less than fifty per cent of the net profits of that year, so long as the amount of the reserve fund is less than fifty per cent of its paid-up capital; or
(ii) a sum equal to not less than twenty-five per cent of the net profits of that year, so long as the amount of the reserve fund is fifty per cent but less than one hundred per cent of its paid-up capital.
(2) Notwithstanding subsection (1), the Bank may specify a different portion of the net profits of each year to be transferred to the reserve fund of a prescribed institution for the purpose of ensuring that
40 PART IV OBLIGATIONS AND SOURCING OF FUNDS-40. Maintenance of assets in Malaysia.
(1) Unless the Bank otherwise approved in writing, a prescribed institution shall hold at all times in Malaysia such minimum amount of assets as the Bank may specify.
(2) For the purpose of subsection (1), the minimum amount of assets to be held in Malaysia shall be expressed as a percentage of all or such of the liabilities of the prescribed institution as the Bank may specify.
(3) Any prescribed institution that contravenes subsection (1) commits an offence and shall on conviction be liable to a fine not exceeding fifty million ringgit.
[(3) Am. Act A1502:s.38]
(4) For the purpose of subsection (1), the Bank may specify a period of not less than seven days within which the prescribed institution shall comply with the specification.
41 PART IV OBLIGATIONS AND SOURCING OF FUNDS-41. Other prudential requirements.
(1) The Bank may specify standards for other prudential matters to promote:
(a) the sound financial position of a prescribed institution; or
(b) integrity, professionalism and expertise in the conduct of the business, affairs and activities of a prescribed institution.
(2) Without prejudice to the generality of subsection (1), standards specified under that subsection may include standards relating to:
(a) corporate governance;
(b) risk management; and
(c) prevention of a prescribed institution from being used, intentionally or unintentionally, for criminal activities.
(3) The Bank may, in the interest of the prescribed institution, specify standards on prudential matters under this section to a subsidiary of a prescribed institution.
(4) Every prescribed institution and a subsidiary of a pre
42 PART IV OBLIGATIONS AND SOURCING OF FUNDS-42. Amendment of constituent documents.
(1) A prescribed institution shall not make any amendment to its constituent documents, unless it has furnished to the Bank in writing particulars of the proposed amendment and obtained the prior written approval of the Bank.
(2) (Deleted by Act A1502:s.40)
(3) A prescribed institution shall, within thirty days after making any amendment to its constituent documents, furnish to the Bank:
(a) in writing particulars of the amendment duly verified by a statutory declaration made by one of its directors; and
(b) a copy of its amended constituent documents.
(4) (Deleted by Act A1502:s.40)
42A PART IVA BUSINESS CONDUCT AND CONSUMER PROTECTION-42A. Interpretation.
For the purposes of this Part and the Second Schedule:
"eligible complainant" means any person who is eligible to refer a dispute to the Financial Ombudsman Scheme in accordance with the terms of the Financial Ombudsman Scheme;
"financial consumer" means any person who uses, has used or may be intending to use, any financial service or product:
(a) for personal, domestic or household purposes;
(b) in connection with a small business as may be specified by the Bank under section 42C; or
(c) whether or not for the purposes set out in paragraph (a) or (b) , if:
(i) the value of the financial services or products does not exceed an amount as may be specified by the Bank under section 42C; or
(ii) such person is of a class, category or description of persons as may be specified by the Bank under section 42C;
42B PART IVA BUSINESS CONDUCT AND CONSUMER PROTECTION-42B. Application.
(1) Sections 42C and 42D shall apply without prejudice to the provisions of the Capital Markets and Services Act 2007 [ Act 671 ] in so far as such provisions relate to any of the regulated activities carried on by a prescribed institution under that Act.
(2) The Bank shall enter into an arrangement in writing with the Securities Commission to coordinate on the regulation of business conduct relating to capital market products or capital market services as defined in subsection 2(1) of the Capital Markets and Services Act 2007, developed, offered or marketed by a prescribed institution.
[42B. Ins. Act A1502:s.41]
42C PART IVA BUSINESS CONDUCT AND CONSUMER PROTECTION-42C. Standards on business conduct.
(1) The Bank may specify standards on business conduct for the purpose of ensuring that a prescribed institution is fair, responsible and professional when dealing with financial consumers.
(2) Without prejudice to the generality of subsection (1), standards specified under that subsection may include standards relating to:
(a) transparency and disclosure requirements including the provision of information that is accurate, clear, timely and not misleading to financial consumers;
(b) fairness of terms in a financial consumer contract for financial services or products;
(c) promotion of financial services or products;
(d) provision of recommendations or advice including assessments of suitability and affordability of financial services or products offered to financial consumers; and
(e) complaints and dispute resolution mechanisms.
42D PART IVA BUSINESS CONDUCT AND CONSUMER PROTECTION-42D. Prohibited business conduct.
(1) A prescribed institution shall not engage in any prohibited business conduct set out in the Second Schedule.
(2) Without prejudice to the generality of section 126, the Bank may issue guidance in writing on:
(a) descriptions of conduct which amount to any prohibited business conduct set out in the Second Schedule; or
(b) factors that are to be taken into account in determining whether a prescribed institution has engaged in any prohibited business conduct set out in the Second Schedule.
(3) Where the Bank issues guidance relating to prohibited business conduct set out in paragraphs 5 and 6 of the Second Schedule, such guidance shall be issued in consultation with the Competition Commission.
(4) Any prescribed institution that contravenes subsection (1) commits an offence and shall on conviction be liable to imprisonment for a term not exceeding five years or to a f
42E PART IVA BUSINESS CONDUCT AND CONSUMER PROTECTION-42E. Financial Ombudsman Scheme.
(1) For the purposes of ensuring effective and fair handling of complaints and for the resolution of disputes in connection with financial services or products, regulations may be made under section 123:
(a) to require any class, category or description of prescribed institutions to be a member of the Financial Ombudsman Scheme and to comply at all times with the terms of membership of such scheme; and
(b) on the terms of the Financial Ombudsman Scheme setting out the scope including types of dispute that may be referred to it and its eligible complainants, the fees that may be charged and the types of award which may be granted under the
(2) A prescribed institution who is a member of the Financial Ombudsman Scheme shall:
(a) provide documents or information as may be required for the purposes of the resolution of disputes referred to the Financial Ombu
43 PART V DEALINGS WITH GOVERNMENT FUNDS-43. Establishment and maintenance of trust fund.
A prescribed institution may, with the agreement of the Government, establish and maintain a separate trust for any fund allocated by the Government, and manage such trust fund for and on behalf of the Government separately from its own funds.
44 PART V DEALINGS WITH GOVERNMENT FUNDS-44. Utilisation of trust funds.
(1) No prescribed institution shall apply the assets of a trust fund to meet liabilities or expenses not properly attributable to that trust fund.
(2) Any prescribed institution that contravenes subsection (1) commits an offence and shall on conviction be liable to a fine not exceeding twenty-five million ringgit.
[(2) Am. Act A1502:s.42]
(3) For the purposes of subsection (1), the Bank may specify the amount and types of liabilities and expenses that may be charged to any trust fund.
(4) The Bank may, if it is satisfied that a prescribed institution has applied any assets of a trust fund to meet liabilities or expenses not properly attributable to that trust fund, direct the prescribed institution to charge such liabilities or expenses to the assets of the relevant trust fund or the assets of the prescribed institution.
(5) (Deleted by Act A1502:s.42)
45 PART V DEALINGS WITH GOVERNMENT FUNDS-45. Investment of trust fund.
A prescribed institution may invest money in any trust fund, in so far as the money is not for the time being required to be expended or utilised for the purposes for which the trust fund was set up, in such investments as the Bank may specify and all income accruing in respect of such investments shall be credited to the trust fund.
46 PART V DEALINGS WITH GOVERNMENT FUNDS-46. Credit into trust fund.
(1) A prescribed institution shall pay into a trust fund all money received by it in respect of the business to which the trust fund relates.
(2) A prescribed institution shall pay to a trust fund all income arising from the investment of the assets of that trust fund.
(3) Any prescribed institution that contravenes this section commits an offence and shall on conviction be liable to a fine not exceeding twenty-five million ringgit.
[(3) Am. Act A1502:s.43]
47 PART V DEALINGS WITH GOVERNMENT FUNDS-47. Property of trust fund as collateral.
(1) No prescribed institution shall provide the property of a trust fund as collateral for a financing facility granted by any person to the prescribed institution or to any other person.
[(1) Gen. Am. Act A1502:s.2]
(2) Any prescribed institution that contravenes subsection (1) commits an offence and shall on conviction be liable to a fine not exceeding twenty-five million ringgit.
[(2) Am. Act A1502:s.44]
48 PART V DEALINGS WITH GOVERNMENT FUNDS-48. Valuation of trust fund.
(1) A prescribed institution shall value the assets and determine the liabilities of a trust fund in such manner as the Bank may specify.
(2) (Deleted by Act A1502:s.45)
49 PART V DEALINGS WITH GOVERNMENT FUNDS-49. Transfer of trust fund.
(1) The Minister may, on the recommendation of the Bank, direct a prescribed institution to transfer all the assets and liabilities of any trust fund to another trust fund maintained and managed by the prescribed institution.
(2) Notwithstanding subsection (1), the Minister may, on the recommendation of the Bank, direct a prescribed institution to transfer any trust fund to another person, including a prescribed institution and section 16 shall apply to the transfer with the necessary modification.
(3) Any prescribed institution that fails to comply with the direction under subsection (1) or (2) commits an offence and shall on conviction be liable to a fine not exceeding five million ringgit.
[(3) Am. Act A1502:s.46]
50 PART V DEALINGS WITH GOVERNMENT FUNDS-50. Breach of trust.
(1) Any director or officer of a prescribed institution who, being in any manner entrusted with property in any trust fund or with any dominion over property in any trust fund either solely or jointly with any other person, dishonestly misappropriates, or converts to his own use, that property, or dishonestly uses or disposes of that property in violation of the provisions of this Part prescribing the mode in which such trust is to be discharged, or wilfully suffers any other person to do so, commits criminal breach of trust.
(2) Any person who commits criminal breach of trust as set out in subsection (1) commits an offence and shall on conviction be liable to imprisonment for a term not exceeding ten years or to a fine not exceeding twice the value of the property which is the subject matter of the breach or fifty million ringgit, whichever is higher, or to both.
[(2) Subs. Act A1502:s.47]
51 PART V DEALINGS WITH GOVERNMENT FUNDS-51. Determination of trust fund.
A trust fund established under section 43 shall be determined upon its winding up or dissolution or the completion of the transfer of its assets and liabilities to another trust fund under section 49.
52 PART V DEALINGS WITH GOVERNMENT FUNDS-52. Application of a trust fund in a winding-up.
(1) In the winding up of a prescribed institution, the assets of a trust fund shall be applied to meet the liabilities of the trust fund to the extent that they are apportioned to the trust fund.
(2) Unless the Minister otherwise approves, where the assets of a trust fund exceeds its liabilities, the surplus assets shall not be applied to meet the liabilities of other trust funds which are deficient.
(3) Any person who contravenes subsection (1) or (2) commits an offence and shall on conviction be liable to imprisonment for a term not exceeding eight years or to a fine not exceeding twenty-five million ringgit or to both.
[(3) Subs. Act A1502:s.48]
53 PART VI CONTROL OF DEFAULTER-53. Inability to meet obligations.
(1) A prescribed institution, which considers that it 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, shall immediately inform the Bank of that fact.
(2) Any prescribed institution that contravenes subsection (1) commits an offence and shall on conviction be liable to a fine not exceeding twenty-five million ringgit.
[(2) Subs. Act A1502:s.49]
54 PART VI CONTROL OF DEFAULTER-54. Action by the Bank.
(1) Where the Bank is satisfied whether pursuant to information under subsection 53(1) or after an examination under Part VIII, or if the Bank is of the opinion, that a prescribed institution:
[(1) Am. Act A1502:s.50]
(a) is carrying on its business in a manner detrimental to the interests of its stakeholders or the public generally;
(b) 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;
[(b) Am. Act A1502:s.50]
(c) has breached or contravened any provision of this Act, the Central Bank of Malaysia Act 2009 or any written law, other than securities laws as defined in the Securities Commission Act 1993 [Act 498], regardless that there has been no prosecution or other action in respect of the breach or contravention;
<
55 PART VI CONTROL OF DEFAULTER-55. Action by the Minister.
Notwithstanding section 54, the Minister may, on the recommendation of the Bank, prescribe:
(a) for the Bank to assume control of all or part of the property, business and affairs of the prescribed institution, and carry on all or part of its business and affairs, or for the Bank to appoint any person to do so on behalf of the Bank, and for the costs and expenses of the Bank, or the remuneration of the person so appointed, to be payable out of the funds and properties of the prescribed institution as a first charge on it;
(b) whether or not an order has been made under paragraph (a) , authorise an application to be made by the Bank to the High Court to appoint a receiver or manager to manage all or part of the business, affairs and property of the prescribed institution, and for all such incidental, ancillary or consequential orders or directions of the High Court in relation to such appointment as
56 PART VI CONTROL OF DEFAULTER-56. [Deleted]
(Deleted by Act A1502:s.51)
57 PART VI CONTROL OF DEFAULTER-57. Appointment under section 54.
(1) A person appointed by the Bank under subparagraph 54(2) (d) (ii), paragraph 54(2)(e), or paragraph 55 (a) shall be appointed subject to such terms and conditions, and for such period, as may be determined by the Bank, and shall hold his appointment at the pleasure of the Bank and shall not incur any obligation or liability solely by reason of his holding such appointment.
(2) The appointment of a director under subparagraph 54(2) (d) (ii) shall not affect any provision of the constituent documents enabling the prescribed institution 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.
(3) Where a receiver or manager has been appointed in respect of a prescribed institution by the High Court under paragraph 55 (b) , all proper costs, charges and expenses, including the remuneration of such recei
58 PART VI CONTROL OF DEFAULTER-58. Removal from office under section 54.
(1) Any officer or director removed from office in a prescribed institution under paragraph 54(2) (c) or subparagraph 54(2) (d) (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 hold any other office in that prescribed institution 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, that prescribed institution.
(2) Any person who contravenes subsection (1) commits an offence and shall on conviction be liable to imprisonment for a term not exceeding eight years or to a fine not exceeding twenty-five million ringgit or to both.
[(2) Subs. Act A1502:s.52]
(3) The removal of an officer or director under paragraph 54(2) (c) or subparagraph 54(2) (d) (i) shall be lawful and valid notwithstanding anything contain
59 PART VI CONTROL OF DEFAULTER-59. Assumption of control.
(1) Where an order is made under paragraph 55 (a) , the prescribed institution and its directors and officers shall submit its property, business and affairs to the control of the Bank or the person appointed by the Bank and shall provide the Bank or such appointed person all such facilities as may be required to carry on the business and affairs of the prescribed institution.
(2) Any person who contravenes subsection (1) commits an offence and shall on conviction be liable to a fine not exceeding twenty-five million ringgit.
[(2) Am. Act A1502:s.53]
(3) The Bank, or the appointed person, as the case may be, shall remain in control of the property, business and affairs of the prescribed institution, and carry on its business and affairs in its name and on its behalf, until such time as the order is revoked under subsection 56(4).
(4) All the powers of the prescribed institution and its direc
60 PART VI CONTROL OF DEFAULTER-60. Reduction of share capital and cancellation of shares.
(1) Notwithstanding anything in any written law or the constituent documents of a prescribed institution, where the paid-up capital of the prescribed institution is lost or unrepresented by available assets, the Bank or the appointed person, as the case may be, may apply to the High Court for an order to reduce its share capital by cancelling any portion of its paid-up 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 prescribed institution, the Court may, if, on the expiry of thirty days from the date of any call made by the prescribed institution on its members to pay on their respective shares, payment on any such shares has not been made, order that such shares for which payment has not been made be cancelled.
(3) Where the share capital of a prescribed institution is reduced under subsection (1), or any of its shares is cancell
61 PART VI CONTROL OF DEFAULTER-61. Extension of jurisdiction.
Any reference in this Part to a prescribed institution shall be read as including a reference to:
(a) its related corporation; and
(b) a person controlled by a director or directors of the prescribed institution, or by persons acting in concert with a director or directors of the prescribed institution.
62 PART VI CONTROL OF DEFAULTER-62. Moratorium.
(1) Where the Bank or an appointed person has assumed control of a prescribed institution, the Minister may, on the recommendation of the Bank, if he considers it to be in the interest of the stakeholders of the prescribed institution or the public generally, prescribe for all or any of the following:
(a) to prohibit the prescribed institution from carrying on all of its business, or any part of it;
(b) to prohibit the prescribed institution from doing or performing any act or function in connection with all of its business or any part of it;
(c) to authorise the Bank, or the appointed person, as the case may be, 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 actions and proceedings of a civil nature by or against the prescribed institution with respect to all or any of its business;
(d) p
63 PART VII AUDITOR AND ACCOUNTS-63. Appointment of auditor.
(1) A prescribed institution shall appoint, for each financial year before a date to be specified by the Bank, an auditor approved by the Bank.
(2) (Deleted by Act A1502:s.55)
(3) Where a prescribed institution fails to appoint an auditor before the date specified in subsection (1),the Bank may appoint an auditor for the prescribed institution and the remuneration and expenses of the auditor as specified by the Bank shall be paid by the prescribed institution.
(4) If the Bank considers it desirable that another auditor should act with the auditor appointed under subsection (1) or (3), the Bank may appoint another auditor, whose remuneration and expenses, as specified by the Bank, shall be paid by the prescribed institution.
64 PART VII AUDITOR AND ACCOUNTS-64. Disqualification of auditor.
(1) No prescribed institution shall knowingly appoint as its auditor a person, and no person shall knowingly consent to be appointed as an auditor of a prescribed institution by the prescribed institution or by the Bank, if that person:
(a) is not an approved company auditor;
(b) has any direct or indirect interest in that prescribed institution, including an interest in its shares;
(c) is a director, controller or employee of that prescribed institution;
(d) is indebted to that prescribed institution or to any related corporation of that prescribed institution; or
(e) has been convicted of any offence under this Act or the Companies Act 1965, or of any offence under any other written law involving fraud or dishonesty.
(2) (Deleted by Act A1502:s.56)
(3) Notwithstanding subsection (1), the Bank may approve in writing
65 PART VII AUDITOR AND ACCOUNTS-65. Restriction on audit firm.
(1) A firm shall not knowingly consent to be appointed, and shall not knowingly act, as auditor for a prescribed institution unless:
(a) all the partners of the firm who are resident in Malaysia are approved company auditors; and
(b) subject to subsection 64(3), no partner is disqualified under paragraph 64(l)(b) to (e) , from acting as the auditor of the prescribed institution.
(2) (Deleted by Act A1502:s.57)
66 PART VII AUDITOR AND ACCOUNTS-66. Consent to act as auditor.
No prescribed institution shall appoint a person as auditor under subsection 63(1) unless that person, prior to his appointment, has consented in writing to act as auditor, and consent in the case of a firm shall be under the hand of at least one of its partners.
67 PART VII AUDITOR AND ACCOUNTS-67. Appointment of audit firm.
The appointment of a firm in the name of the firm as auditor shall take effect and operate as an appointment of the persons who are members of that firm at the time of the appointment.
68 PART VII AUDITOR AND ACCOUNTS-68. Auditor not deemed to be employee.
For the purposes of this Part, a person shall not be deemed to be an employee of a prescribed institution or its related corporation by reason only of his having been appointed an auditor of the prescribed institution or its related corporation.
69 PART VII AUDITOR AND ACCOUNTS-69. Auditor's report.
(1) An auditor of a prescribed institution shall submit a report of the audit to the members of the prescribed institution and the report:
(a) in the case of a prescribed institution which is a company, shall be made in accordance with section 174 of the Companies Act 1965; and
(b) in the case of a prescribed institution, other than a company, shall certify whether or not in the opinion of the auditor:
(i) all the information and explanations which are in the opinion of the auditor necessary for the purposes of the audit have been obtained;
(ii) according to the best of the information and explanations given to him, the profit and loss account and balance sheet give a true and fair view of the state of the affairs of the prescribed institution for the financial year concerned;
(iii) books of account have been kept properly by the prescribed institution so far as it appe
70 PART VII AUDITOR AND ACCOUNTS-70. Additional requirement on auditor.
(1) The Bank may require an auditor to:
(a) submit such additional information in relation to his audit as the Bank may specify; or
(b) enlarge or extend the scope of his audit of the business and affairs of the prescribed institution in such manner or to such extent as the Bank may specify,
within such time as the Bank may specify and the prescribed institution shall pay to the auditor such remuneration as the Bank may specify.
(2) (Deleted by Act A1502:s.59)
71 PART VII AUDITOR AND ACCOUNTS-71. Auditor to report certain matters to the Bank.
(1) An auditor shall immediately report to the Bank if, in the course of his duties as an auditor of a prescribed institution, he is satisfied that:
(a) there has been a contravention of or failure to comply with any provision of this Act or any specification or requirement made, or any order in writing, direction, instruction, or notice given, or any limit, term, condition or restriction imposed under this Act;
(b) an offence involving fraud or dishonesty under any other written law has been committed by the prescribed institution or any of its employees;
(c) losses have been incurred by the prescribed institution which reduce its capital funds to an extent that the prescribed institution is no longer able to comply with the specifications of the Bank under subsection 38(1);
(d) any irregularity which jeopardises the interest of stakeholders of the prescribed institution,
72 PART VII AUDITOR AND ACCOUNTS-72. Information to auditor.
(1) A prescribed institution, and its director, controller or employee shall:
(a) furnish to its auditor any information within its knowledge which the auditor may require; and
(b) ensure that information furnished to the auditor is not false or misleading or incomplete in any material particular.
(2) Any person who contravenes subsection (1) commits 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.
73 PART VII AUDITOR AND ACCOUNTS-73. Annual accounts.
(1) A prescribed institution shall, within ninety days after the end of each financial year, or such further period as the Bank may approve, submit to the Bank, in respect of its entire operations inside and outside Malaysia, a copy each in print and in record stored or recorded by electronic means and on electronic medium the following documents in such form as the Bank may specify:
(a) duly audited revenue account together with supporting statements;
(b) duly audited profit and loss account and balance sheet together with supporting statements;
(c) a certificate by the auditor;
(d) a report by the board of directors on its operations in the financial year; and
(e) a statutory declaration by one of its non-executive directors and its chief executive officer in respect of matters in paragraphs (a), (b) and (d) .
(2) An
74 PART VII AUDITOR AND ACCOUNTS-74. Quarterly returns.
(1) A prescribed institution shall submit to the Bank in respect of its operations for each quarter of a calendar year two copies each of the following in such form, and within such time, as the Bank may specify:
(a) a revenue account together with supporting statements;
(b) a profit and loss account and balance sheet together with supporting statements; and
(c) a certification of the documents mentioned in paragraph (a) or (b) signed by the chief executive officer and the employee responsible for its financial management.
(2) Any prescribed institution that contravenes subsection (1) commits 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.
<75 PART VII AUDITOR AND ACCOUNTS-75. Accounting standards.
(1) A prescribed institution shall maintain its accounts in compliance with approved accounting standards.
(2) Any prescribed institution that contravenes subsection (1) commits an offence and shall on conviction be liable to a fine 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) Approved accounting standards referred to in subsection (1) shall have the same meaning assigned to it under section 2 of the Financial Reporting Act 1997 [Act 558].
76 PART VII AUDITOR AND ACCOUNTS-76. Annual accounts and quarterly returns to be rectified.
(1) The Bank may, by notice in writing, require a prescribed institution to submit additional information or explanation in relation to any document or information submitted under section 73 or 74 within such time as the Bank may specify.
(2) Any prescribed institution that contravenes subsection (1) commits an offence and shall on conviction be liable to a fine not exceeding one million ringgit.
(3) The Bank may require the additional information or explanation to be certified by the prescribed institution's auditor.
(4) The Bank may, after considering the explanation referred to in subsection (1), or if such explanation has not been given by or on behalf of the prescribed institution within the time specified:
(a) reject the document submitted under section 73 or 74; or
(b) direct the prescribed institution to vary the document or all other related documents within such time as is
77 PART VII AUDITOR AND ACCOUNTS-77. Submission of annual accounts.
(1) A prescribed institution shall, within fourteen days of the laying of its accounts at its annual general meeting, or within such further period as the Bank may approve, submit to the Bank a copy each in print and in record stored or recorded by an electronic means and on electronic medium, of its accounts as laid before the annual general meeting together with minutes of the meeting duly certified by its company secretary.
(2) Any prescribed institution that contravenes subsection (1) commits 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.
78 PART VII AUDITOR AND ACCOUNTS-78. Action in relation to annual accounts.
(1) A prescribed institution shall, within fourteen days of the laying of its accounts at its annual general meeting, or within such further period as the Bank may approve:
(a) publish in not less than two daily newspapers published in Malaysia and approved by the Bank, one in the national language and another in English language; and
(b) exhibit in a conspicuous position at each of its branches in Malaysia,
a copy each of the reports of the board of directors, its revenue account, profit and loss account and balance sheet as laid before its general meeting and such other document as the Bank may specify.
(2) Any prescribed institution that contravenes subsection (1) commits 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 w
79 PART VII AUDITOR AND ACCOUNTS-79. Admissibility of document.
In any proceedings, a certificate signed by an authorised officer of the Bank stating that a document is submitted by a prescribed institution under section 73 or 74 or is a document that accompanies a document so submitted, shall be admissible in court as evidence of the fact so certified.
80 PART VII AUDITOR AND ACCOUNTS-80. Liability where proper accounting records not kept.
(1) If accounting records necessary to exhibit and explain the transactions and true financial condition of a prescribed institution are not kept, a past and present employee of the prescribed institution responsible for keeping proper accounting records commits an offence unless he proves that the offence was committed without his consent or connivance and that he exercised such diligence to prevent the commission of the offence as he ought to have exercised, having regard to the nature of his function in that capacity and to the circumstances.
(2) Any person who contravenes subsection (1) commits 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 fine not exceeding three thousand ringgit for each day during which the offence continues after conviction.
81 PART VII AUDITOR AND ACCOUNTS-81. Application to trust fund.
For the avoidance of doubt, it is hereby declared that in the preparation of documents in relation to a prescribed institution's operations under this Part, sections 69 to 80 shall apply with the necessary modifications to the operation of each of the trust funds managed by the prescribed institution under Part V.
82 PART VIII EXAMINATION AND INVESTIGATION-82. Examination by the Bank.
The Bank may, from time to time, examine, with or without any prior notice, the books or other documents, accounts and transactions of a prescribed institution and any of its offices in or outside Malaysia.
83 PART VIII EXAMINATION AND INVESTIGATION-83. Power of Minister to direct examination.
The Minister may at any time direct the Bank to examine the books or other documents, accounts and transactions of any prescribed institution and any of its offices in or outside Malaysia if he suspects that such prescribed institution is carrying on its business in a manner which is, or which is likely to be, detrimental to the interests of its stakeholders or has insufficient assets to cover its liabilities to the public, or is contravening any provision of this Act or any other written law.
84 PART VIII EXAMINATION AND INVESTIGATION-84. Duty to produce and provide access to document and information.
(1) A prescribed institution under examination and its director, employee and agent:
(a) shall afford the examiner access to its documents;
(b) shall provide the examiner facility to carry out the examination; and
(c) shall give to the examiner, orally or in writing, such information as he may require relating to the business of that person, or his agent, within such time as may be specified by the examiner.
(2) Any person who contravenes subsection (1) commits 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.
(3) An examiner may take possession of a document or cash to which he has access unde
85 PART VIII EXAMINATION AND INVESTIGATION-85. Examination of person other than prescribed institution.
(1) The examiner may examine:
(a) a person who is, or was at any time, a director or employee of a prescribed institution or of its agent;
(b) a person who is, or was at any time, a client of, or otherwise having dealings with, the prescribed institution; or
(c) a person whom he believes to be acquainted with the facts and circumstances of the case, including the auditor of a prescribed institution,
and that person shall give such document or information as the examiner may require within such time as he may specify.
(2) Any person who contravenes subsection (1) commits an offence and shall on conviction be liable to a fine not exceeding one million ringgit or to imprisonment for a term not exceeding one year or to both 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
86 PART VIII EXAMINATION AND INVESTIGATION-86. Appearance before examiner.
(1) A person examined under section 82 or 83 or subsection 85(1) shall appear before the examiner at his office at such time as he may specify.
(2) Any person who contravenes subsection (1) commits an offence and shall on conviction be liable to a fine not exceeding one million ringgit or to imprisonment for a term not exceeding one year or to both 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.
86A PART VIII EXAMINATION AND INVESTIGATION-86A. Confidential information.
(1) Any document or information produced by the Bank as provided in subsection (2) as a result of the administration or enforcement of this Act, the Central Bank of Malaysia Act 2009 or any other written law administered by the Bank, shall not be disclosed, whether wholly or in part, by any prescribed institution or any director, officer, auditor or a member of the Shariah committee of such prescribed institution, to any other person except in such circumstances as may be specified by the Bank.
(2) The document or information referred to in subsection (1) shall include:
(a) any rating assigned by the Bank to a prescribed institution;
(b) any stage of intervention assigned to a prescribed institution;
(c) any assessment of a prescribed institution as a result of an examination or other supervisory review of such prescribed institution including any report, correspondence or recommen
87 PART VIII EXAMINATION AND INVESTIGATION-87. Investigation by the Bank.
Where the Bank has reason to suspect the commission of an offence under this Act, the Bank shall cause an investigation to be conducted.
88 PART VIII EXAMINATION AND INVESTIGATION-88. Appointment of investigating officer.
(1) For the purposes of an investigation under this Part, the Bank may appoint its employee or any other person to be an investigating officer.
(2) The Bank may instruct any person to take such steps as may be necessary to facilitate an investigation under subsection (1).
(3) An investigating officer who is not an employee of the Bank shall be subject to, and enjoy such rights, protection and indemnity as may be specified in this Act, the Central Bank of Malaysia Act 1958 or other written law applicable to an employee of the Bank.
(4) An investigating officer shall be subject to the direction and control of the Bank which has authorised him to act on its behalf.
89 PART VIII EXAMINATION AND INVESTIGATION-89. Powers of an investigating officer.
(1) An investigating officer appointed under subsection 8 8(1) may, without a search warrant:
(a) enter any premises belonging to or in possession or control of the prescribed institution or its holding company, subsidiary, or employee;
(b) search the premises for any property, record, report or document and seize and detain my property, record, report or document which is necessary in the investigating officer's opinion, for the purpose of an investigation into an offence under this Act;
(c) inspect, make copies of, or take extracts from, any record, report or document so seized and detained;
(d) take possession of, and remove from the premises, any property, record, report or document so seized and detained and detain it for such period as he deems necessary;
(e) search any person who is in, or on, such premises, if the investigating officer has reason t
90 PART VIII EXAMINATION AND INVESTIGATION-90. Power to examine persons.
(1) Notwithstanding any written law, or oath, undertaking or requirement of secrecy or confidentiality to the contrary, or an obligation under an agreement or arrangement, express or implied, to the contrary, an investigating officer conducting an investigation shall have the power to administer an oath or affirmation to a person who is being examined.
(2) An investigating officer may order, orally or in writing, a person whom he believes to be acquainted with the facts and circumstances of the case:
(a) to attend before him for examination;
(b) to produce before him any property, record, report or document; or
(c) to furnish to him a statement in writing made on oath or affirmation setting out such information as he may require.
(3) Any person who contravenes subsection (2) commits an offence and shall on conviction be a liable to a fine not exceeding one mil
91 PART VIII EXAMINATION AND INVESTIGATION-91. Admissibility of evidence.
The record of an examination under paragraph 90(2) (a) , any property, record, report or document produced under paragraph 90(2) (b) or any statement under paragraph 90(2) (c) shall, notwithstanding any written law or rule of law to the contrary, be admissible in evidence in any court proceedings for, or in relation to, an offence under this Act, or any other written law regardless whether such proceedings are against the person examined, or who produced the property, record, report or document, or who made the written statement on oath or affirmation or against any other person.
92 PART VIII EXAMINATION AND INVESTIGATION-92. Search of person.
(1) An investigating officer searching any person under paragraph 89(l) (e) may detain the person for such period as may be necessary to have the search carried out, which shall not in any case exceed twenty-four hours without the authorisation of a magistrate, and may, if necessary, remove the person in custody to another place to facilitate such search.
(2) No person shall be searched under this Part except by an investigating officer of the same gender and such search shall be carried out with strict regard to decency.
93 PART VIII EXAMINATION AND INVESTIGATION-93. Obstruction to exercise of powers by an investigating officer.
(1) Any person who:
(a) refuses any investigating officer access to any premises, or fails to submit to the search of his person;
(b) assaults, obstructs, hinders or delays an investigating officer in effecting any entrance which he is entitled to effect;
(c) fails to comply with any lawful demands of any investigating officer in the execution of his duties under this Part;
(d) refuses to give to an investigating officer any property, document or information which may reasonably be required of him and which he has in his power to give;
(e) fails to produce to, or conceal or attempt to conceal from, an investigating officer, any property, record, report or document, which the investigating officer requires;
(f) rescues or attempts to rescue any thing which has been duly seized;
(g) furnishes to an investigating officer as t
94 PART VIII EXAMINATION AND INVESTIGATION-94. Requirement to provide translation.
(1) Where an investigating officer finds, seizes, detains, or takes possession of any property, record, report or document which, wholly or partly, is in a language other than the national language or English language, or is in any sign or code, the investigating officer may, orally or in writing, require the person who had the possession, custody or control of the property, record, report or document, to furnish to him a translation in the national language or English language within such period as he may specify.
(2) No person shall knowingly furnish a translation under subsection (1) which is not an accurate, faithful and true translation of the document.
(3) Any person who fails to comply with the requirement in subsection (1) or contravenes subsection (2) commits an offence and shall on conviction be liable to a fine not exceeding five hundred thousand ringgit or to imprisonment for a term not exceeding six months or to both and, i
95 PART VIII EXAMINATION AND INVESTIGATION-95. Delivery of property, record, report or document.
(1) An investigating officer may, by a notice in writing, require any person to deliver to him any property, record, report or document which he has reason to suspect has been used in the commission of an offence under this Act or is able to assist in the investigation of an offence under this Act that is in the possession or custody of, or under the control of, that person or within the power of that person to furnish.
(2) An investigating officer may grant permission to any person to inspect the property, record, report or document he had detained and taken possession of under subsection (1) if the person is entitled to inspect such property, record, report or document under this Act.
(3) A person who:
(a) fails to deliver any property, record, report or document that is required by an investigating officer; or
(b) obstructs or hinders an investigating officer while exercising any of his
96 PART VIII EXAMINATION AND INVESTIGATION-96. Seizing of property, record, report or document.
An investigating officer may seize, take possession of, and retain for such duration as he deems necessary any property, record, report or document produced before him in the course of an examination under paragraph 90(2)(a) or (b) , or search of a person under subsection 92(1), for ascertaining whether anything relevant to the investigation is concealed, or is otherwise, upon such person.
97 PART VIII EXAMINATION AND INVESTIGATION-97. Release of property, record, report or document seized.
(1) An investigating officer shall, unless otherwise ordered by any court:
(a) on the close of an investigation or any proceedings arising from the investigation; or
(b) with the prior written consent of the Bank or any investigating officer superior to him in rank, at any time before the close of investigation, release any property, record, report or other document seized, detained or removed by him or any other investigating officer, to such person as he determines to be lawfully entitled to the property, record, report or document if he is satisfied that it is not required for the purpose of any prosecution or proceedings under this Act, or for the purpose of any prosecution under any other written law.
(2) The investigating officer effecting the release under subsection (1) shall record in writing the circumstances of, and the reason for such release.
(3) Where the investigating officer is unable to
98 PART VIII EXAMINATION AND INVESTIGATION-98. Investigating officer may arrest without warrant.
An investigating officer appointed under section 88 may arrest without warrant a person whom he reasonably suspects to have committed or to be committing any offence under this Act.
99 PART VIII EXAMINATION AND INVESTIGATION-99. Arrested person to be made over to police officer.
An investigating officer who makes an arrest under section 98 shall make over the arrested person to a police officer without unnecessary delay and the arrested person shall be dealt with according to the law relating to criminal procedure as if he had been arrested by a police officer.
100 PART VIII EXAMINATION AND INVESTIGATION-100. Assistance to police or other public officer.
Notwithstanding any other written law, the Bank, on its own initiative, or at the request of a police officer or a public officer in the course of his investigation of an offence under any written law, may allow that officer access to:
(a) a copy of a document seized, detained or taken possession of;
(b) a record of examination; or
(c) a written statement on oath or affirmation.
101 PART VIII EXAMINATION AND INVESTIGATION-101. Investigating officer deemed to be public servant and public officer.
An investigating officer shall be deemed to be a public servant for the purposes of the Penal Code [Act 574] , and to be a public officer for the purposes of the Criminal Procedure Code.
102 PART VIII EXAMINATION AND INVESTIGATION-102. Report to Minister.
(1) The Minister charged with the responsibility for a development financial institution or with the responsibility for the subject or matter relating to any of the businesses or activities carried on by a development financial institution may submit a report to the Minister with a recommendation to examine into the affairs of the development financial institution under sections 84 to 86.
(2) The State Authority, in the case of:
(a) a development financial institution which is a statutory body established by State law or by any subsidiary legislation made under any State law; or
(b) any other development financial institution which falls under the responsibility, powers, control or jurisdiction of the State Authority, may submit a report to the Minister with a recommendation to examine the business and affairs of the development financial institution under sections 84 to 86.
103 PART VIII EXAMINATION AND INVESTIGATION-103. Powers of Minister.
(1) Where the Minister receives a report and recommendation under section 102, he may decide, on the recommendation of the Bank:
(a) not to take any action in the matter, and inform the Minister referred to in subsection 102(1) or the State Authority referred to in subsection 102(2) which submitted the report accordingly; or
(b) that it is necessary to examine into the business and affairs of the development financial institution for the protection of the interests of its stakeholders.
(2) For the avoidance of doubt it is hereby declared that:
(a) before the Minister makes a decision under paragraph (1) (b); or
(b) before the Minister referred to in subsection 102(1) or the State Authority referred to in subsection 102(2), submits the report and recommendation under section 102 to the Minister,
it shall not
104 PART VIII EXAMINATION AND INVESTIGATION-104. Application of sections 84 to 86.
(1) Where the Minister decides that it is necessary to examine the business and affairs of a development financial institution under paragraph 103(l)(b), the provisions of sections 84 to 86 shall apply to the development financial institution as if it was prescribed in such manner, to such extent, and with all such amendments as the Minister may, on the recommendation of the Bank, prescribe.
(2) An order of the Minister under subsection (1) shall be deemed to be an integral part of this Act and be read as one with this Act, and shall have full force and effect notwithstanding anything inconsistent with, or contrary to this Act.
105 PART VIII EXAMINATION AND INVESTIGATION-105. Application of sections 89 to 101.
Where any development financial institution for which an order is made under subsection 104(1) contravenes subsection 84(1), 85(1) or 86(1), the provisions of sections 89 to 101 shall apply to that development financial institution.
106 PART VIII EXAMINATION AND INVESTIGATION-106. Provisions of this Part to prevail.
The provisions of this Part shall have full force and effect notwithstanding anything contained in any other written law.
107 PART IX MISCELLANEOUS-107. [Deleted]
( Deleted by Act A1502:s.94 )
107A PART IX MISCELLANEOUS-107A. Enforceable undertakings.
(1) The Minister or the Bank may accept a written undertaking given by a person in connection with a matter relating to the powers and functions of the Minister or the Bank, as the case may be.
(2) The written undertaking accepted under subsection (1) may be varied or withdrawn by the person giving the undertaking with the consent of the Minister or the Bank, as the case may be.
(3) If the Bank considers that a person who has given a written undertaking to the Minister or the Bank has breached any of the terms of the undertaking:
(a) the Bank may apply, in relation to the undertaking given to the Bank; or
(b) the Bank may recommend to the Minister to apply, in relation to the undertaking given to the Minister,
to the High Court for an order under subsection (4) by way of originating summons.
(4) If the High Court is satisfied that a person has breached any of t
108 PART IX MISCELLANEOUS-108. Falsification, concealment and destruction of document.
A person, with intent to deceive, in respect of a document to be produced or submitted under any provision of this Act, who makes or causes to be made a false entry, omits to make, or causes to be omitted, any entry, or alters, abstracts, conceals or destroys, or causes to be altered, abstracted, concealed or destroyed, any entry, forges a document, or makes use of or hold in his possession a false document, purporting to be a valid document, alters any entry made in any document, or issues or uses a document which is false or incorrect, wholly or partially, or misleading commits an offence and shall on conviction be liable to a fine not exceeding one million ringgit or to imprisonment for a term not exceeding one year or to both 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.
109 PART IX MISCELLANEOUS-109. Offence by body corporate.
(1) Where an offence is committed by a body corporate or an association of persons, a person:
(a) who is its director, controller, officer, or partner; or
(b) who is concerned in the management of its affairs,
at the time of the commission of the offence, is deemed to have committed that offence unless that person proves that the offence was committed without his consent or connivance and that he exercised such diligence to prevent the commission of the offence as he ought to have exercised, having regard to the nature of his function in that capacity and to the circumstances.
(2) An individual may be prosecuted for an offence under subsection (1) notwithstanding that the body corporate or association of persons has not been convicted of the offence.
(3) Subsection (1) shall not affect the criminal liability of the body corporate or association of persons for the offen
110 PART IX MISCELLANEOUS-110. Offence by an individual.
Where a person is liable under this Act to a penalty for any act, omission, neglect or default, he shall be liable to the same penalty for the act, omission, neglect or default of his employee, director, controller, or agent if the act, omission, neglect or default was committed by:
(a) his employee in the course of the employee's employment;
(b) his director in carrying out the function of a director;
(c) his controller in carrying out the function of a controller; or
(d) his agent when acting on his behalf.
111 PART IX MISCELLANEOUS-111. Joinder of offences.
Notwithstanding anything contained in any other written law, where a person is accused of more than one offence under this Act, he may be charged with and tried at one trial for any number of the offences committed within any length of time.
112 PART IX MISCELLANEOUS-112. Seizable offence.
Every offence punishable under this Act shall be a seizable offence.
113 PART IX MISCELLANEOUS-113. Power of Governor to compound offences.
(1) The Governor may, with the consent of the Public Prosecutor, offer in writing to compound any offence under this Act, or under regulations made under this Act, by accepting from the person reasonably suspected of having committed the offence such amount not exceeding fifty per cent of the amount of the maximum fine for that offence, including the daily fine, if any, in the case of a continuing offence, to which that person would have been liable if he had been convicted of the offence, within such time, as may be specified in the offer.
(2) Any money paid to the Governor pursuant to subsection (1) shall be paid into and shall form part of the Federal Consolidated Fund.
(3) An offer under subsection (1) may be made at any time after the offence has been committed, but before any prosecution for it has been instituted, and where the amount specified in the offer is not paid within the time specified in the offer, or such extended of t
114 PART IX MISCELLANEOUS-114. Attempts, preparations, abetments and conspiracies punishable as offences.
(1) Any person who:
(a) attempts to commit an offence under this Act;
(b) does an act preparatory to, or in furtherance of, the commission of an offence under this Act; or
(c) abets or is engaged in a criminal conspiracy to commit (as those terms are defined in the Penal Code) an offence under this Act, whether or not the offence is committed in consequence of it,
commits an offence and is liable to the penalty for that offence.
(2) A provision of this Act which refers to an offence under a specific provision of this Act shall be read as including a reference to an offence under subsection (1) in relation to the offence under that specific provision.
115 PART IX MISCELLANEOUS-115. Annual report.
The Bank shall include in its annual accounts and annual report made under subsection 48(1) of the Central Bank of Malaysia Act 1958 an annual report on the working of this Act during the preceding calendar year before the end of April each year and the report shall include a summary of documents lodged with it.
116 PART IX MISCELLANEOUS-116. Submission of information and statistics.
(1) A prescribed institution and a development financial institution for which an order is made under subsection 104(1) shall submit to the Bank, or such person as the Bank may specify, such document or information as it may require by notice in writing within such time as it may specify and the prescribed institution or the development financial institution, as the case may be, shall not submit any document which it knows, or has reason to believe, to be false or misleading.
(2) Any institution that contravenes subsection (1) commits 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.
(3) A prescribed institution which is a scheduled institution under the Banking and Financial Institutions Act 1989 [Act 372] shall submit under subs
117 PART IX MISCELLANEOUS-117. Indemnity.
No action, suit, prosecution or other proceedings shall lie or be brought, instituted or maintained in any court or before any authority against the Minister, the Bank, its director, officer or employee or any person acting on its behalf, either personally or in his official capacity for, or on account of, or in respect of an act done or statement made, or omitted to be done or made, or purporting to be done or made or omitted to be done or made, in pursuance of or in execution of, or intended pursuance of or execution of, this Act or any order in writing, direction, instruction or other thing issued under this Act if such act or statement was done or made, or was omitted to be done or made, in good faith.
118 PART IX MISCELLANEOUS-118. Prohibition on receipt of gifts, commission, etc.
(1) No director, officer or agent of a prescribed institution, or any other person being a person receiving any payment or remuneration in any capacity, professional or otherwise, from such prescribed institution, shall, directly or indirectly, ask for or receive, or consent or agree to receive, any gift, commission, emolument, gratuity, money, property, token or thing of value exceeding one hundred ringgit or any service, facility or other intangible benefit, whether for his own personal benefit or advantage or for the benefit or advantage of any other person, from any person other than from the prescribed institution, for procuring or endeavouring to procure for any person:
(a) any credit facility from that prescribed institution; or
(b) any other thing relating to the business or affairs of that prescribed institution.
(2) The provisions of subsection (1) shall not in any manner de
119 PART IX MISCELLANEOUS-119. Secrecy.
(1) Except for the purposes of this Act, nothing in this Act shall authorise the Bank or the Minister to direct the Bank to inquire specifically into the affairs of any individual client of a prescribed institution or a development financial institution.
(2) No director or officer of any prescribed institution or of any external bureau established, or any agent appointed, by the prescribed institution to undertake any part of its business, whether during or after his tenure of office, or during or after his employment, and no person who for any reason has by any means access to any record, book, register, correspondence, or other document, or material, relating to the affairs or, in particular, the account of any particular customer of the prescribed institution, shall give, produce, divulge, reveal, publish or otherwise disclose, to any person, or make a record for any person, of any information or document relating to the affairs or account o
120 PART IX MISCELLANEOUS-120. Permitted disclosure.
(1) Section 119 shall not apply to the disclosure of information or document:
(a) to the Minister, the Bank, its director or employee, a person appointed under subsection 4(3) or an appointed person, where the disclosure is in the course of performance of functions;
(b) to a person rendering service to the Bank in relation to a matter requiring professional knowledge;
(c) which the customer, or his personal representative, has given permission in writing to disclose;
(d) in a case where the customer is declared bankrupt, or, if the customer is a corporation, the corporation is being or has been wound up, in Malaysia or in any country, territory or place outside Malaysia;
(e) where the information is required by a party to a bona fide commercial transaction, or to a prospective bona fide commercial transaction, to which the customer is als
121 PART IX MISCELLANEOUS-121. Decision of Minister to be final.
Except as otherwise provided in this Act, any decision made by the Minister under this Act, whether an original decision by him or a decision on appeal to him from a decision of the Bank, shall be final.
122 PART IX MISCELLANEOUS-122. Exemptions.
The Minister may, upon the recommendation of the Bank, if he considers it consistent with the purposes of this Act or in the interest of the public, by order published in the Gazette , exempt any prescribed institution from any of the provisions of this Act for such duration and subject to such condition as the Minister may specify.
123 PART IX MISCELLANEOUS-123. Regulations.
(1) The Minister may, on the recommendation of the Bank, make such regulations as are necessary or expedient to give full effect to or for carrying out the provisions of this Act.
(2) Without prejudice to the generality of subsection (1), regulations may be made:
(a) to provide that any act or omission in contravention of any provision of such regulations shall be an offence;
(b) to provide for the imposition of penalties for such offences which shall not exceed a fine of one million ringgit or imprisonment for a term not exceeding one year or both; and
(c) to provide for the imposition of an additional penalty for a continuing offence which shall not exceed one thousand ringgit for each day that the offence continues after conviction.
124 PART IX MISCELLANEOUS-124. Amendment of Schedule.
The Minister may, by order published in the Gazette , amend the Schedule.
125 PART IX MISCELLANEOUS-125. Application of other laws.
(1) Where there is a conflict or inconsistency between the provisions of this Act and that of the:
(a) Banking and Financial Institutions Act 1989;
(b) Bank Kerjasama Rakyat Malaysia Berhad (Special Provisions) Act 1978 [Act 202];
(c) Companies Act 1965;
(d) Co-operatives Societies Act 1993; or
(e) the constituent documents of a prescribed institution,
the provisions of this Act shall prevail.
(2) Where any difficulty or doubt arises in the application of subsection (1) in relation to any particular prescribed institution, or any particular matter or circumstance, or generally, the Minister may on the reference of the difficulty or doubt to him by the Bank, resolve the same by a direction in writing.
(3) References to "this Act" in this section shall not include any regulations, order or other subsidiary legis
126 PART IX MISCELLANEOUS-126. Power to issue guidelines, etc .
The Bank may issue such guidelines, circulars or notices in respect of this Act relating to the conduct of the business and affairs of a prescribed institution as are necessary or expedient to give full effect to or for carrying out the provisions of this Act.
127 PART IX MISCELLANEOUS-127. Application of Exchange Control Act 1953.
Nothing contained in this Act shall in any manner affect, or derogate from, the provisions of the Exchange Control Act 1953 [Act 17] , and in the application of any provision of this Act to any person, the provision shall apply subject to the provisions of that Act and, accordingly, in the event of any conflict or inconsistency between any provision of this Act and that Act, the provisions of that Act shall prevail.
128 PART IX MISCELLANEOUS-128. Contravention not to affect contract, agreement or arrangement.
(1) Except as otherwise provided in this Act, or in pursuance of any provision of this Act, no contract, agreement or arrangement entered into in contravention of any provision of this Act shall be void solely by reason of such contravention.
(2) Subsection (1) shall not affect any criminal liability of any person for an offence under this Act in respect of such contravention.
129 PART IX MISCELLANEOUS-129. Islamic banking or financial business.
(1) Nothing in this Act or the Islamic Banking Act 1983 [Act 276] shall prohibit or restrict any prescribed institution from carrying on Islamic banking business or Islamic financial business in addition to its existing business, provided that the prescribed institution shall obtain the prior written approval of the Bank before it carries on Islamic banking business or any Islamic financial business.
(2) For the avoidance of doubt, it is declared that a prescribed institution shall, in respect of the Islamic banking business or Islamic financial business carried on by it, be subject to the provisions of this Act.
(3) The Bank may, in consultation with the Syariah Advisory Council established under the Banking and Financial Institutions Act 1989, issue directions to a prescribed institution on matters relating to Islamic banking business or any other Islamic financial business and the prescribed institution shall comply with the
130 PART IX MISCELLANEOUS-130. Savings.
(1) Any requirement for the approval of the Minister or the Bank, as the case may be, under this Act shall be deemed to have been given in accordance with the provisions of this Act and shall continue to remain in full force and effect in relation to the persons to whom it applies until modified, rescinded or revoked in accordance with the provisions of this Act.
(2) The chief executive officer or director of a prescribed institution shall, on the commencement date be deemed to have complied with the Minimum Criteria for Appointment in the Schedule and notwithstanding any disqualification under section 7, shall continue to remain in office until the expiry of his term of appointment.
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