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ACT 125
COMPANIES ACT 1965 (REVISED - 1973)
PART IV - SHARES, DEBENTURES AND CHARGES
DIVISION 3A - SUBSTANTIAL SHAREHOLDINGS

 
Section 69N. Powers of Court with respect to defaulting substantial shareholders.
 
Section 69N. Powers of Court with respect to defaulting substantial shareholders. (COMPANIES ACT 1965 (REVISED - 1973) - ACT 125) (1) Where a person (in this section referred to as "the substantial shareholder") is, or at any time after the date on which this Division came into operation has been, a substantial shareholder in a company and has failed to comply with section 69E, 69F or 69G, the Court may, whether or not that failure still continues, on the application of the Registrar, make one or more of the following orders—

    (a) an order restraining the substantial shareholder from disposing of any interest in shares in the company in which he is or has been a substantial shareholder;

    (b) an order restraining a person who is, or is entitled to be registered as, the holder of shares referred to in paragraph (a) from disposing of any interest in those shares;

    (c) an order restraining the exercise of any voting or other rights attached to any share in the company in which the substantial shareholder has or has had an interest;

    (d) an order directing the company not to make payment, or to defer making payment, of any sum due from the company in respect of any share in which the substantial shareholder has or has had an interest;

    (e) an order directing the sale of all or any of the shares in the company in which the substantial shareholder has or has had an interest;

    (f) an order directing the company not to register the transfer or transmission of specified shares;

    (g) an order that any exercise of the voting or other rights attached to specified shares in the company in which the substantial shareholder has or has had an interest be disregarded;

    (h) for the purposes of securing compliance with any other order made under this section, an order directing the company or any other person to do or refrain from doing a specified act.

(2) Any order under this section may include such ancillary or consequential provisions as the Court thinks just.

(3) An order under this section directing the sale of a share may provide that the sale shall be made within such time and subject to such conditions, if any, as the Court thinks fit, including, a condition that the sale shall not be made to a person who is, or, as a result of the sale, would become, a substantial shareholder in the company.

(4) The Court may direct that where a share is not sold in accordance with an order of the Court under this section, the share shall vest in the Registrar.

(5) The Court shall, before making an order under this section and in determining the terms of such an order, satisfy itself, so far as it can reasonably do so, that the order would not unfairly prejudice any person and the Court shall not make an order under this section, other than an order restraining the exercise of voting rights, if it is satisfied—

    (a) that the failure of the substantial shareholder to comply as mentioned in subsection (1) was due to his inadvertence or mistake or to his not being aware of a relevant fact or occurrence; and

    (b) that, in all the circumstances, the failure ought to be excused.

(6) The Court may, before making an order under this section, direct that notice of the application be given to such persons as it thinks fit or direct that notice of the application be published in such manner as it thinks fit, or both.

(7) The Court may rescind, vary or discharge an order made by it under this section or suspend the operation of such an order.

(8) Section 311 applies in relation to a share that vests in the Registrar under this section as the first-mentioned section applies in relation to an estate or interest in property referred to in the first-mentioned section.

(9) A person who contravenes or fails to comply with an order under this section which is applicable to him shall be guilty of an offence against this Act.

Penalty: Three thousand ringgit. Default penalty: Five hundred ringgit.

(10) Subsection (9) does not affect the powers of the Court in relation to the punishment of contempt of the Court.