PART IV - SHARES, DEBENTURES AND CHARGES DIVISION 2 - RESTRICTIONS ON ALLOTMENT AND COMMENCEMENT OF BUSINESS
Section 48. Prohibition of allotment unless minimum subscription received.
(1) No allotment shall be made of any shares of a company offered to the public or offered for subscription or purchase or where an invitation to subscribe for or purchase shares is made pursuant to a prospectus that is registered under the Securities Commission Act 1993 unless -
(a) the minimum subscription has been subscribed; and
(b) the sum payable on application for the shares so subscribed has been received by the company,
but if a cheque for the sum payable has been received by the company, the sum shall be deemed not to have been received by the company until the cheque is paid by the bank on which it is drawn.
(2) The minimum subscription shall be -
(a) calculated on the nominal value of each share, and where the shares are issued at a premium, on the nominal value of, and the amount of the premium payable on, each share; and
(b) reckoned exclusively of any amount payable otherwise than in cash.
(3) The amount payable on application on each share offered to the public or offered pursuant to a prospectus that is registered under the Securities Commission Act 1993 shall not be less than five per centum of the nominal amount of the share.
(4) If the conditions referred to in subsection (1) (a) and (b) have not been satisfied on the expiration of four months after the first issue of the prospectus, all money received from applicants for shares shall he forthwith repaid to them without interest, and, if any such money is not so repaid within five months after the issue of the prospectus, the directors of the company shall be jointly and severally liable to repay that money with interest at the rate of ten per centum per annum from the expiration of the period of five months but a director shall not be so liable if he proves that the default in the repayment of the money was not due to any misconduct or negligence on his part.
(5) An allotment made by a company to an applicant in contravention of this section or of section 50 (1) shall be voidable at the option of the applicant which option may be exercised by written notice served on the company within one month after the holding of the statutory meeting of the company, and not later, or, in any case where the company is not required to hold a statutory meeting, or where the allotment is made after the holding of the statutory meeting, within one month after the date of the allotment, and not later, and the allotment shall be so voidable notwithstanding that the company is in course of being wound up.
(6) Every director of a company who knowingly contravenes or permits or authorizes the contravention of this section or of section 50 (1) shall be guilty of an offence against this Act and shall be liable in addition to the penalty or punishment for the offence to compensate the company and the allottee respectively for any loss, damages or costs which the company or the allottee has sustained or incurred thereby but no proceedings for the recovery of any such compensation shall be commenced after the expiration of two years from the date of the allotment.
Penalty: Imprisonment for three years or one million ringgit or both.
(7) Any condition requiring or binding any applicant for shares to waive compliance with any requirements of this section shall be void.
(8) No company shall allot, and no officer or promoter of a company or a proposed company shall authorize or permit to be allotted-
(a) any shares or debentures to the public on the basis of a prospectus after the expiration of six months or such longer period as the Registrar may allow from the date of issue of the prospectus; or
(b) any securities as defined under the Securities Commission Act 1993 on the basis of a prospectus that is registered under that Act later than such period after the date of issue of the prospectus as the Securities Commission may specify.
Penalty: Imprisonment for three years or one million ringgit.;
(a) shares or debentures is made on the basis of a prospectus after the expiration of six months or such longer period as the Registrar may allow from the date of issue of the prospectus; or
(b) securities is made on the basis of a prospectus that is registered under the Securities Commission Act 1993 later than such period after the date of issue of the prospectus as the Securities Commission may specify,
the allotment shall not by reason only of that fact be voidable or void.