Section 67A. Purchase by a company of its own shares, etc. (COMPANIES ACT 1965 (REVISED - 1973)

ACT 125
COMPANIES ACT 1965 (REVISED - 1973)

PART IV - SHARES, DEBENTURES AND CHARGES
DIVISION 3 - SHARES

Section 67A. Purchase by a company of its own shares, etc.

(1) Notwithstanding the provisions of section 67, a public company with a share capital may, if so authorized by its articles, purchase its own shares.

[Am. Act A1043: s.2]

(2) A company shall not purchase its own shares unless-

(

it is solvent at the date of the purchase and will not become insolvent by incurring the debts involved in the obligation to pay for the shares so purchased;

(

the purchase is made through the Stock Exchange on which the shares of the company are quoted and in accordance with the relevant rules of the Stock Exchange; and

(

the purchase is made in good faith and in the interests of the company.

[Am. Act A1043: s.2]

(3) Notwithstanding section 60, the company may apply its share premium account the consideration for the purchase of its own shares.

[Subs. Act A1043: s.2]

(3A) Where a company has purchased its own shares, the directors of the company may resolve-

(

) to cancel the shares so purchased;

(

) to retain the shares so purchased in treasury (in this Act referred to as "treasury shares"); or

(

) to retain part of the shares so purchased as treasury shares and cancel the remainder.

[Ins. Act A1043: s.2]

(3B) The directors of the company may-

(

) distribute the treasury shares as dividends to shareholders, such dividends to be known as "share dividends"; or

(

) resell the treasury shares on the market of the Stock Exchange on which the shares are quoted, in accordance with the relevant rules of the Stock Exchange.

[Ins. Act A1043: s.2]

(3C) While the shares are held as treasury shares, the rights attached to them as to voting, dividends and participation in other distribution and otherwise are suspended and the treasury shares shall not be taken into account in calculating the number or percentage of shares or of a class of shares in the company for any purposes including, without limiting the generality of this provision, the provisions of any law or requirements of the articles of association of the company or the listing rules of a Stock Exchange on substantial shareholding, takeovers, notices, the requisitioning of meetings, the quorum for a meeting and the result of a vote on a resolution at a meeting.

[Ins. Act A1043: s.2]

(3D) Where the directors decide to distribute the treasury shares as share dividends, the costs of the shares on the original purchase shall be applied in the reduction of either the share premium account or the funds otherwise available for distribution as dividends or both.

[Ins. Act A1043: s.2]

(3E) Where the directors resolve to cancel the shares so purchased, or cancel any treasury shares, the issued capital of the company shall be diminished by the shares so cancelled and the amount by which the company's issued capital is diminished shall be transferred to the capital redemption reserve.

[Ins. Act A1043: s.2]

(4) The capital redemption reserve may be applied in paying up unissued shares of the company to be issued to members of the company as fully paid bonus shares.

(5) A cancellation of shares made pursuant to subsection (3E) shall not be deemed to be a reduction of share capital within the meaning of this Act.

[Am. Act A1043: s.2]

(6) A company shall, within fourteen days after the shares are purchased, lodge with the Registrar and the Stock Exchange a notice in the prescribed form.

(7) If default is made in complying with this section, the company, every officer of the company and any other person or individual who is in default shall be guilty of an offence against this Act.

Penalty: Imprisonment for five years or one hundred thousand ringgit or both.

[Ins. Act A1007:s.2]