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

(1) This Act may be cited as the Malaysian Airline System Berhad (Administration) Act 2015 .

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

2 PART I PRELIMINARY-2. Application.

(1) This Act shall apply-

(a) for a period of five years from the date of the coming into operation of this Act; or

(b) until the listing and quotation of the shares of the Malaysia Airlines Berhad on the official list of Bursa Malaysia Berhad,

whichever is earlier.

(2) Notwithstanding subsection (1), the Minister may, by order published in the Gazette, declare an earlier cessation of this Act.

(3) Notwithstanding subsection (1), this Act may, by a resolution passed by both Houses of Parliament, be extended for a further period as may be specified in the resolution.

3 PART I PRELIMINARY-3. Interpretation.

In this Act, unless the context otherwise requires-

  "regulatory body"  means an authority that is responsible for the enforcement of laws;

  "proposal"  means the proposal under paragraph 17(1) (b) ;

  "rights"  means all rights, powers, privileges and immunities, whether actual, contingent or prospective;

  "property"  includes all property, movable and immovable, and all interests, easement or rights, whether equitable or legal in, to or out of the property, choses in action, money and goodwill;

  "Malaysia Airlines Berhad"  means the corporation referred to in section 23;

  "Minister"  means the Prime Minister of Malaysia;

4 PART II ADMINISTRATION-4. Placement of the company, etc , under administration.

Subject to the prior written approval of the Minister, a member of the company, or the board of directors of the company pursuant to a resolution of the board of directors, may place-

(a) the company;

(b) any wholly owned subsidiary company of the company; and

(c) the following partially owned subsidiary companies of the company:

(i) Abacus Distribution Systems (Malaysia) Sdn. Bhd. (company No. 180535-T);

(ii) Aerokleen Services Sdn. Bhd. (company No. 277266-X); and

(iii) MAS Awana Services Sdn. Bhd. (company No. 372384-D),

under administration in accordance with this Act.

5 PART II ADMINISTRATION-5. Appointment of Administrator.

(1) The member of the Company or the board of directors of the Company referred to in section 4 shall appoint an Administrator for the Administered Companies.

(2) The appointer may at any time after the appointment of the Administrator under subsection (1) appoint a new Administrator to replace the existing Administrator.

(3) Where the Administrator is released from his appointment, he shall, with effect from such release, be discharged from all duties and liabilities in respect of his administration or in relation to his conduct as the Administrator.

6 PART II ADMINISTRATION-6. Duration of administration.

The administration of the Administered Companies by the Administrator shall commence from the date of appointment of the Administrator under subsection 5(1) and shall continue until the administration is terminated by the appointer.

7 PART II ADMINISTRATION-7. Qualifications of Administrator.

(1) No person shall be appointed as an Administrator unless he-

(a) is a natural person; and

(b) has consented in writing to his appointment.

(2) The following persons shall be qualified to be appointed as an Administrator:

(a) a company auditor approved under the Companies Act 1965; or

(b) a person who is, in the opinion of the appointer, capable of performing the duties of an administrator.

(3) The following persons shall not be qualified to be appointed as an Administrator:

(a) an undischarged bankrupt;

(b) a mortgagee of any property of the Administered Companies;

(c) a person with direct or indirect shareholding in the Administered Companies;

(d) a person who is, directly or indirectly, interested in any contract or arrangement to p

8 PART II ADMINISTRATION-8. Notification of appointment of Administrator.

(1) The Administrator shall within seven days after his appointment-

(a) lodge a notice of the appointment with the Registrar of Companies; and

(b) cause a notice of his appointment to be published in at least two national daily newspapers, one of which shall be in the national language.

(2) Every invoice, order for goods or services, business letter, cheque, credit note, negotiable instrument or bill of lading which is issued by or on behalf of the Administered Companies or the Administrator after the appointment of the Administrator shall contain the words "Administrator Appointed".

(3) Any non-compliance of subsections (1) and (2) shall not affect the validity of the acts of the Administrator in the administration of the Administered Companies.

(4) For the purpose of this section,   "Registrar of Companies"  has the meaning assigned to it

9 PART II ADMINISTRATION-9. Functions of Administrator.

(1) The Administrator shall have the following functions:

(a) to carry out the business and operations (including the restructuring of such operations) of the Administered Companies;

(b) to take into his custody or under his control the property, liabilities, businesses and affairs of the Administered Companies and all the property to which the Administered Companies are or appear to be entitled;

(c) to manage the property, business, liabilities and affairs of the Administered Companies in the name and on behalf of the Administered Companies, including the disposal of property and liabilities;

(d) to assume control and exercise all powers conferred on the directors under the Companies Act 1965 or by the constitution of the Administered Companies, and the powers of the directors of the Administered Companies shall then cease except in so far as the Administrator may permit;

10 PART II ADMINISTRATION-10. Powers of Administrator.

In performing his functions under section 9, the Administrator shall have the following powers:

(a) to carry on the business of the Administered Companies;

(b) to do all things (including the carrying out of works) as may be necessary for the management, realization and preservation of the property, undertakings and affairs of the Administered Companies;

(c) to appoint any person as a director of any of the Administered Companies, whether to fill a vacancy or otherwise, and to remove or suspend from office any director of the Administered companies notwithstanding the Memorandum and Articles of Association or any other law;

(d) to take possession of the property of the Administered Companies and for that purpose, to take such proceedings as may seem to him expedient;

(e) to sell or otherwise dispose of all or part of the property, business, undertaking or

11 PART II ADMINISTRATION-11. Effect of appointment of Administrator.

(1) On the appointment of the Administrator, a moratorium shall take effect during which-

(a) no petition for the winding up of the Administered Companies may be filed by any person in any court;

(b) no resolution may be passed or order made for the winding up of the Administered Companies;

(c) no receiver, receiver and manager or provisional liquidator, may be appointed, or if appointed, his appointment shall immediately cease and he shall vacate his office;

(d) no steps may be taken-

(i) to create, perfect or enforce any security over any property of the Administered companies;

(ii) to enforce a judgment over any property of the Administered Companies;

(iii) to re-possess any property in the possession, custody or control of the Administered Companies; or

(iv) to set off any debt owing to the Administered Companies in respect

12 PART II ADMINISTRATION-12. Moratorium.

(1) The duration of the moratorium referred to in section 11, unless the administration is sooner terminated under section 6 or paragraph 20(3) (c) , shall be for a period of twelve months commencing from the date of the appointment of the Administrator under subsection 5(1).

(2) The Minister may, upon the written request of the Administrator or the appointer, extend the moratorium for a period of not more than twelve months upon being satisfied that the circumstances warrant such extension, and such power of extension shall not be exercisable more than once.

(3) if the period of the moratorium is extended under subsection (2), the Administrator shall cause a notice of the extension to be published in at least two national daily newspapers, one of which shall be in the national language.

13 PART II ADMINISTRATION-13. Undue preference.

(1) On the appointment of the Administrator, any transfer, mortgage, execution, attachment, obligation, settlement, charge, assignment, delivery of goods, payment or other act relating to any property made, incurred or done by or against the Administered Companies which, had it been made, incurred or done by or against an individual, would in his bankruptcy under the law of bankruptcy be void or voidable, may be avoided or recoverable by the Administrator.

(2) Where a reference is made in the law of bankruptcy to a date for the purpose of determining the effect of bankruptcy on transactions mentioned in subsection (1), that date shall be the date on which this Act comes into operation.

14 PART II ADMINISTRATION-14. Transition services.

(1) Where any person is under a contract or obligation to provide goods or services or both to the Administered Companies, such person shall continue to provide the goods or services or both to the Malaysia Airlines Berhad and its subsidiary companies instead of the Administered Companies, where required by the Administrator, and the Malaysia Airlines Berhad and its subsidiary companies shall pay for such goods or services or both at the same rate as would have been paid by the Administered Companies.

(2) Notwithstanding any other provisions of this Act or any other law, where the person fails to provide the goods or services or both to the Malaysia Airlines Berhad and its subsidiary companies as required under subsection (1), the Malaysia Airlines Berhad and its subsidiary companies shall have the right to recover from such person any costs incurred or damages for any loss suffered.

15 PART II ADMINISTRATION-15. Investigation by Administrator.

(1) The Administrator may require any officer of the Administered Companies to verify and submit to the Administrator a statement as to the affairs of the Administered Companies within twenty-one days.

(2) The statement shall be in such form as may be determined by the Administrator and shall contain the following information:

(a) the particulars of all property and liabilities;

(b) the names and addresses of the creditors;

(c) the securities held by the creditors and the dates when the securities were given;

(d) a statutory declaration made under the Statutory Declarations Act 1960 [Act 13] , declaring the information in the statement of affairs as being true and correct; and

(e) any other information as may be required by the Administrator.

16 PART II ADMINISTRATION-16. Duties of officers to assist in investigation.

(1) An officer of the Administered companies shall within seven days after a request from the Administrator-

(a) deliver to the Administrator all books, records and documents of the Administered Companies in the possession of the officer; and

(b) if the officer knows the location of other books, records and documents relating to the Administered Companies, inform the Administrator of the location of those books, records and documents.

(2) An officer of the Administered Companies shall-

(a) attend to the Administrator at such times; and

(b) give the Administrator such information concerning the Administered Companies' property, affairs and financial circumstances,

as the Administrator may reasonably require.

(3) The Administrator shall, on the completion of the administration under this Act, return to the Administe

17 PART III PROPOSAL OF ADMINISTRATOR AND APPOINTMENT OF INDEPENDENT ADVISOR-17. Administrator may re-negotiate contracts or prepare proposal or both.

(1) The Administrator may, in the administration of the Administered Companies, at his sole discretion, take any one or both of the following actions:

(a) re-negotiate the terms and conditions of any contracts or agreements of the Administered Companies with the counterparties;

(b) prepare a proposal with respect to the Administered Companies or any claims and liabilities against or of the Administered Companies.

(2) The proposal referred to in subsection (1) (b) may include any provision as the Administrator thinks fit.

(3) Without prejudice to the generality of subsection (2), the proposal may provide for the transfer of any property, business or liability of the Administered Companies to a person named in the proposal-

(a) by means of vesting under Part V; or

(b) in accordance with the relevant law applicable to effect

18 PART III PROPOSAL OF ADMINISTRATOR AND APPOINTMENT OF INDEPENDENT ADVISOR-18. Appointment and qualifications of Independent Advisor.

(1) Upon being notified by the Administrator that a proposal will be prepared under section 17, the appointer shall appoint an Independent Advisor.

(2) No person shall be appointed as an Independent Advisor unless-

(a) the person has consented in writing to the appointment;

(b) the person is independent of the appointer, management and board of directors of the Administered Companies and the Malaysia Airlines Berhad, and has no interest whatsoever in the Administered Companies and the Malaysia Airlines Berhad; and

(c) the person is-

(i) an investment bank;

(ii) a firm of accountants; or

(iii) a person (other than a natural person) who is permitted to carry on the activity of advising on corporate finance which is a regulated activity under the Capital Markets and Services Act 2007 [Act 671] and who, in the opinion of the appointer, has

19 PART III PROPOSAL OF ADMINISTRATOR AND APPOINTMENT OF INDEPENDENT ADVISOR-19. Review of proposal by Independent Advisor.

(1) The Independent Advisor shall carry out a review of the proposal prepared by the Administrator under section 17.

(2) In reviewing the proposal, the Independent Advisor may take into consideration-

(a) the interests of all persons affected by the proposal, including the creditors, the Administered Companies and the Malaysia Airlines Berhad, if applicable, giving each category of persons affected by the proposal such weightage as he thinks fit; or

(b) such other matters or consideration as the Independent Advisor may consider relevant or appropriate under the circumstances.

(3) Upon the completion of the review, the Independent Advisor shall prepare a report on his review and submit the report to the Administrator and the appointer.

20 PART III PROPOSAL OF ADMINISTRATOR AND APPOINTMENT OF INDEPENDENT ADVISOR-20. Decision of the appointer.

(1) The appointer shall consider the proposal of the Administrator together with the report of the Independent Advisor submitted to the appointer under subsection 19(3).

(2) Where the appointer approves the proposal, the Administrator shall implement the proposal in accordance with its terms.

(3) Where the appointer rejects the proposal, the appointer may-

(a) direct the Administrator to revise the proposal;

(b) direct the Administrator to prepare a new proposal; or

(c) terminate the administration of the Administered Companies.

21 PART III PROPOSAL OF ADMINISTRATOR AND APPOINTMENT OF INDEPENDENT ADVISOR-21. Implementation of proposal.

(1) Where the approval of a regulatory body is required to implement the proposal and conditions are imposed by the regulatory body, the Administrator shall refer the conditions imposed to the appointer.

(2) If the appointer thinks that the conditions are not in the interest of the Administered Companies, the appointer may-

(a) direct the Administrator to revise the proposal;

(b) direct the Administrator to prepare a new proposal; or

(c) terminate the administration of the Administered Companies.

(3) Prior to the implementation of the proposal, the Administrator shall send a copy of the proposal and the report of the Independent Advisor by registered post to the last-known address of or through electronic medium to each of the creditors of the Administered Companies affected by the proposal and any other persons affected by the terms of the proposal.

(

22 PART III PROPOSAL OF ADMINISTRATOR AND APPOINTMENT OF INDEPENDENT ADVISOR-22. Transfer of property or liabilities.

(1) If the proposal directs that property or liabilities are to be transferred, the Administrator shall transfer the property or liabilities to the transferee in accordance with the vesting provisions under Part V and the terms and conditions set out in the proposal.

(2) For the purpose of this section, a reference to "Malaysia Airlines Berhad" in Part V shall be construed as a reference to the proposed transferee named in the proposal.

23 PART IV MALAYSIA AIRLINES BERHAD-23. Incorporation of Malaysia Airlines Berhad.

The corporation incorporated under the Companies Act 1965 by the name of "Malaysia Airlines Berhad" shall have the main objective of operating the national carrier of Malaysia and shall carry on the business of the national carrier as a commercial enterprise and such other businesses as the board of directors of the Malaysia Airlines Berhad thinks fit.

24 PART IV MALAYSIA AIRLINES BERHAD-24. Offer of employment.

The Malaysia Airlines Berhad may, in its sole discretion, offer employment to any person who immediately before the date of that offer is in the employment or service of the Administered Companies on such terms and conditions as the Malaysia Airlines Berhad may determine.

25 PART IV MALAYSIA AIRLINES BERHAD-25. Malaysia Airlines Berhad, etc, not a successor employer.

(1) Notwithstanding anything to the contrary in this Act or under any law, where the Administrator assumes control of the Administered Companies, or where the Malaysia Airlines Berhad makes an offer of employment to a person in the employment or service of the Administered Companies, or where the Malaysia Airlines Berhad enters into a transition service agreement with the Administered Companies, the Administrator, appointer or the Malaysia Airlines Berhad shall not-

(a) be regarded as the successor, assignee or transferee or a successor employer to the Administered Companies;

(b) be liable for any obligation relating to any retirement plan or other post-employment benefit plans in respect of the employees or former employees of the Administered Companies or any predecessor of the Administered Companies that exists prior to the assumption of control or appointment; or

(c) be liable for any

26 PART IV MALAYSIA AIRLINES BERHAD-26. Work rules, code of conduct and regulations.

The Malaysia Airlines Berhad may, if it thinks fit, impose any work rules, code of conduct and regulations in relation to its employees in accordance with all applicable laws.

27 PART IV MALAYSIA AIRLINES BERHAD-27. Negotiation with trade unions and associations.

(1) All matters to be discussed or negotiated between the Malaysia Airlines Berhad and-

(a) any trade union duly recognized by the Malaysia Airlines Berhad in accordance with the Industrial Relations Act 1967 and the Trade Unions Act 1959; and

(b) any association recognized by the Malaysia Airlines Berhad,

shall be by way of meetings, of which fourteen days' notice shall be given to the trade unions and associations by the Malaysia Airlines Berhad.

(2) A meeting to be convened under subsection (1) shall not proceed unless all of the trade unions and associations are duly represented in the meeting.

(3) If after half an hour from the time appointed for a meeting, not all of the trade unions and associations are duly represented, the meeting shall stand adjourned to the subsequent week, on the same day and time and at the same venue without any further notice.

(4

28 PART IV MALAYSIA AIRLINES BERHAD-28. Matters relating to productivity or effective utilization of workforce.

(1) Notwithstanding section 27, the following matters that relate to or impact the productivity or effective utilization of the workforce in the Malaysia Airlines Berhad shall be determined by the Malaysia Airlines Berhad:

(a) resourcing and allocation of resources;

(b) assessment of employees;

(c) leave entitlement; and

(d) working hours and scheduling of work, including flight time limitation and flight duty periods.

(2) The Malaysia Airlines Berhad in determining any matters under subsection (1) shall comply with all applicable laws and international standards.

29 PART V VESTING OF PROPERTY AND LIABILITIES-29. Vesting provisions.

(1) The Minister may, from time to time, by order published in the Gazette , appoint a vesting date for each order and on such date any property or liabilities of the Administered Companies specified by the Minister in such order shall be transferred to and vested in the Malaysia Airlines Berhad without any conveyance, assignment or transfer whatsoever.

(2) The vesting pursuant to subsection (1) shall have the effect set out in the schedule notwithstanding any written law or rule of law and shall be binding on any person affected by such vesting.

30 PART V VESTING OF PROPERTY AND LIABILITIES-30. Replacement vesting order.

(1) The Minister may issue a new vesting order ("replacement vesting order") to replace any vesting order previously issued in order to rectify any omission or error in the vesting order.

(2) Any replacement vesting order issued under subsection (1), stating that a property or liability has been transferred to and vested in the Malaysia Airlines Berhad, shall be conclusive evidence of such transfer and vesting as of the vesting date stipulated in the replacement vesting order.

(3) if any law stipulates a time period within which a transfer of any property or liability stated to be the subject of a replacement vesting order shall be registered or filed, that period shall commence from the vesting date stipulated in the replacement vesting order or the date the replacement vesting order is issued, whichever is later.

(4) Any act done by the Malaysia Airlines Berhad or any other person, in reliance on a vesting order previously iss

31 PART VI GENERAL-31. Non-application of section 132E of the Companies Act 1965.

Section 132E of the Companies Act 1965 shall not apply to any disposition by any arrangement or transaction between the company and the Malaysia Airlines Berhad.

32 PART VI GENERAL-32. Indemnity for administrator, etc .

(1) The Administrator, the appointer and any other person are entitled to be indemnified out of the Administered Companies' property for-

(a) in the case of the Administrator, his costs, expenses and remuneration as provided under the terms of his appointment;

(b) in the case of the appointer, the repayment of any credit facility provided by the appointer to the Administrator or to the Administered Companies during the administration of the Administered Companies;

(c) in the case of the Malaysia Airlines Berhad, the repayment of any credit facility provided by the Malaysia Airlines Berhad to the Administrator or to the Administered Companies during the administration of the Administered Companies; or

(d) in the case of any other person, the repayment of any credit facility provided by that person to the Administrator or the Administered Companies during the administration

33 PART VI GENERAL-33. Immunity.

(1) No action, suit, prosecution or proceeding whatsoever shall lie or be brought, instituted or maintained in any court or tribunal or before any authority against-

(a) the Minister;

(b) the appointer;

(c) the Administrator;

(d) the independent Advisor;

(e) any officer of the persons referred to in paragraphs (b) and (d); or

(f) any person lawfully acting on behalf of the appointer, the Administrator and the independent Advisor,

for any loss or damage for or on account of, or in respect of any act or matter done or ordered to be done or omitted to be done by him in good faith and in the exercise of any power or discharge of any duty conferred on him or it under this Act.

(2) No action, suit, prosecution or proceeding whatsoever shall lie or be brought, instituted or maintained in any court or tribunal or befo

34 PART VI GENERAL-34. Limits on the grant of orders of court.

(1) Notwithstanding any law, an order of a court cannot be granted-

(a) which stays, restrains or affects the powers of the Administrator under this Act;

(b) which stays, restrains or affects any action taken or proposed to be taken by the Administrator under this Act; or

(c) which compels the Administrator to do or perform any act,

and any such order, if granted, shall be void and unenforceable and shall not be the subject of any process of execution whether for the purpose of compelling obedience of the order or otherwise.

(2) The decisions of the appointer in sections 4 and 5, the Minister in subsection 12(2) and the Administrator in subsection 17(1) shall be final.

35 PART VI GENERAL-35. Validity of transaction.

Notwithstanding any written law or rule of law, any payment made, transaction entered into, or any other act or thing done in good faith by or with the consent of the Administrator shall be valid and effective for the purposes of this Act and shall not be considered as an undue preference in the winding up of the Administered Companies.

36 PART VI GENERAL-36. Things done in anticipation of the enactment of this Act.

(1) All acts and things done by any person in connection with the property, liabilities, businesses and affairs of the Administered companies in preparation for or in anticipation of the enactment of this Act and any expenditure incurred in relation to the acts and things done shall be deemed to have been authorized under this Act, if the acts and things done are consistent with the general intention and purposes of this Act.

(2) The incorporation of the Malaysia Airlines Berhad and all acts and things done by any person on behalf of the Malaysia Airlines Berhad and all rights and obligations acquired or incurred on behalf of the Malaysia Airlines Berhad shall, upon the coming into operation of this Act, be deemed to be done under this Act and shall be the rights and obligations of the Malaysia Airlines Berhad.