PART IV - SHARES, DEBENTURES AND CHARGES DIVISION 3 - SHARES
Section 60. Issue of shares at a premium.
(1) In this section -
"arrangement" means any agreement, scheme or arrangement (including an arrangement sanctioned in accordance with section 176 or 270);
"company" except in references to the issuing company, includes any body corporate;
"equity share capital" means, in relation to a company, its issued share capital excluding any part thereof which neither as respects dividends nor as respects capital, carries any right to participate beyond a specified amount in a distribution;
"equity shares" means shares comprised in a company's equity share capital;
"issuing company" means the company issuing the shares in the circumstances referred to in this section;
"minimum premium value" means the amount, if any, by which the base value of the shares transferred exceeds the aggregate nominal value of the shares allotted in consideration for the transfer;
"non-equity shares" means shares of any class not comprised in a company's equity share capital.
Share premium account.
(2) Where a company issues shares for which a premium is received by the company whether in cash or in the form of other valuable consideration a sum equal to the aggregate amount or value of the premiums on those shares shall be transferred to an account called the "share premium account" and the provisions of this Act relating to the reduction of the share capital of a company shall subject to this section apply as if the share premium account were paid-up share capital of the company.
(3) The share premium account may be applied -
(a) in paying up unissued shares to be issued to members of the company as fully paid bonus shares;
(b) in paying up in whole or in part the balance unpaid on shares previously issued to members of the company;
(c) in the payment of dividends if such dividends are satisfied by the issue of shares to members of the company;
(d) in the case of a company which carries on insurance business in Malaysia by appropriation or transfer to any statutory fund established and maintained pursuant to any law of Malaysia relating to insurance;
(e) in writing off -
(i) the preliminary expenses of the company; or
(ii) the expenses of, or the commission or brokerage paid or discount allowed on, any duty, fee or tax payable on or in connection with, any issue of shares of the company; or
(f) in providing for the premium payable on redemption of redeemable preference shares.
Merger relief.
(4)(a) Subsection (2) shall not apply -
(i) where an issuing company has secured at least ninety per centum equity holding in another company in pursuance of any arrangement providing for the allotment of equity shares issued at a premium in the issuing company on terms that the consideration for the shares allotted is to be provided by the issue or transfer to the issuing company of equity shares in that other company or by the cancellation of any such shares not held by the issuing company; and
(ii) where the arrangement also provides for the allotment of any shares in the issuing company on terms that the consideration for those shares is to be provided by the issue or transfer to the issuing company of non-equity shares in the other company or by the cancellation of any such shares in that company not held by the issuing company.
(b) Subject to paragraph (c), the issuing company shall be regarded for the purposes of this subsection as having secured at least ninety per centum equity holding in another company in pursuance of any such arrangement as is mentioned in paragraph (a) if, in consequence of any acquisition or cancellation of equity shares in that company in pursuance of that arrangement it holds equity shares in that company (whether all or any of those shares were acquired in pursuance of that arrangement or not) of an aggregate nominal value equal to ninety per centum or more of the nominal value of that company's equity share capital.
(c) Where the equity share capital of the other company in question is divided into different classes of shares this subsection shall not apply unless the requirements of paragraph (a) above are satisfied in relation to each of those classes taken separately.
(d) Shares held by a company which is the issuing company's holding company or subsidiary of the issuing company's holding company, or by its or their trustees, shall be regarded for the purposes of this subsection as held by the issuing company.
(5)(a) Where the issuing company -
(i) is a wholly-owned subsidiary of another company (the holding company); and
(ii) allots shares to the holding company or to another wholly-owned subsidiary of the holding company in consideration for the transfer to the issuing company of assets, other than cash, being assets of any company (the transferor company) which is a member of the group of companies which comprises the holding company and all its wholly-owned subsidiaries,
the issuing company shall not be required by subsection (2) to transfer any amount in excess of the minimum premium value to the share premium account where the shares in the issuing company allotted in consideration for the transfer are issued at a premium.
(b) In paragraph (a), "the minimum premium value" means the amount, if any, by which the base value of the consideration for the shares allotted exceeds the aggregate nominal value of those shares.
(c) For the purposes of paragraph (b), the base value of the consideration for the shares allotted shall be the amount by which the base value of assets transferred exceeds the base value of any liabilities of the transferor company assumed by the issuing company as part of the consideration for the assets transferred.
(d) For the purposes of paragraph (c) -
(i) the base value of the assets transferred shall be taken as the cost of those assets to the transferor company or the amount at which those assets are stated in the transferor company's accounting records immediately before the transfer, whichever is the less; and
(ii) the base value of the liabilities assumed shall be taken as the amount at which they are stated in the transferor company's accounting records immediately before the transfer.
(e) Subsection (4) shall not apply in any case to which this subsection applies.
(i) the issuing company has issued at a premium shares which were allotted in pursuance of any arrangement providing for the allotment of shares in the issuing company on terms that the consideration for the shares allotted was to be provided by the issue or transfer to the issuing company of shares in another company or by the cancellation of any shares in that other company not held by the issuing company; and
(ii) that other company must either have been, at the time of the arrangement, a subsidiary of the issuing company or of any company which was then the issuing company's holding company or have become such a subsidiary on the acquisition or cancellation of its shares in pursuance of the arrangement,
any part of the premiums on the shares so issued which was not transferred to the company's share premium account in accordance with subsection (2) shall be treated as if subsection (2) had never applied to those premiums (and may accordingly be disregarded in determining the sum to be included in the company's share premium account).
(b) This subsection applies only where a company has issued shares in circumstances to which the subsection applies before the coming into operation of the subsection.
(7)(a) An amount corresponding to any amount representing the premiums or part of the premiums on shares issued by a company which by virtue of subsection (4), (5) or (6) is not included in the company's share premium account may also be disregarded in determining the amount at which any shares or other consideration provided for the shares issued is to be included in the company's balance-sheet.
(b) References in subsections (4) to (6) and in this subsection (however expressed) to -
(i) the acquisition by any company of shares in another company; and
(ii) the issue or allotment of shares to or the transfer of shares to or by any company,
include references respectively to the acquisition of any of those shares by and to the issue or allotment or (as the case may require) the transfer of any of those shares to or by trustees of that company; and the reference in subsection (5) (b) (i) to the company transferring the shares there-mentioned shall be construed accordingly.
(c) References in subsections (4) to (6) and in this subsection to the transfer of shares in a company include references to the transfer of a right to be included in the company's register of members in respect of those shares.
(8) Regulations may be made making provision for and in relation to -
(i) relief from the requirement of subsection (2) in relation to premium other than cash premium; or
(ii) restrictions or modification of any relief from those requirements provided by subsections (4) to (7) of this section.