ACT 125
COMPANIES ACT 1965 (REVISED - 1973)
PART IV - SHARES, DEBENTURES AND CHARGES
DIVISION 2 - RESTRICTIONS ON ALLOTMENT AND COMMENCEMENT OF BUSINESS

 
Section 49. Application moneys to be held in trust until allotment.
 
Section 49. Application moneys to be held in trust until allotment. (COMPANIES ACT 1965 (REVISED - 1973) - ACT 125) (1) All applications and other moneys paid prior to allotment by any applicant on account of shares or debentures offered to the public or of any securities for which a prospectus is required under the Securities Commission Act 1993 shall until the allotment be held by the company, or in the case of an intended company by the persons named in the prospectus as proposed directors and by the promoters, upon trust for the applicant, but there shall be no obligation or duty on any bank or third person with whom any such moneys have been deposited to inquire into or see to the proper application of the moneys so long as the bank or person acts in good faith.

(2) If default is made in complying with this section every officer of the company in default or, in the case of an intended company, every person named in the prospectus as a proposed director and every promoter who knowingly and wilfully authorizes or permits the default shall be guilty of an offence against this Act.

Penalty: Imprisonment for three years or ten thousand ringgit.