ACT 125

COMPANIES ACT 1965 (REVISED - 1973)

PART IV - SHARES, DEBENTURES AND CHARGES

DIVISION 4 - DEBENTURES

Section 76. Contents of trust deed.

(1) Where a corporation offers debentures to the public for subscription in Malaysia the debentures or the relevant trust deed shall contain a limitation on the amount that the borrowing corporation may, pursuant to those debentures or that deed, borrow and shall contain covenants by the borrowing corporation, or if the debentures do not or the trust deed does not expressly contain those covenants they or it shall be deemed to contain covenants by the borrowing corporation, to the following effect— (a) that the borrowing corporation will use its best endeavours to carry on and conduct its business in a proper and efficient manner; (b) that, to the same extent as if the trustee for the holders of the debentures or any approved company auditor appointed by the trustee were a director of the corporation the borrowing corporation will— (i) make available for its or his inspection the whole of the accounting or other records of the borrowing corporation; and (ii) give to it or him such information as it or he requires with respect to all matters relating to the accounting or other records of the borrowing corporation; and (c) that the borrowing corporation will, on the application of persons holding not less than one-tenth in nominal value of the issued debentures to which the covenant relates delivered to its registered office, by giving notice— (i) to each of the holders of those debentures (other than debentures payable to bearer) at his address as specified in the register of debentures; and (ii) by an advertisement in a daily newspaper circulating generally throughout Malaysia addressed to all holders of those debentures, summon a meeting of the holders of those debentures to consider the accounts and balance sheet which were last lodged with the trustee for the holders of the debentures by the borrowing corporation and to give to the trustee directions in relation to the exercise of the trustee's powers, such meeting to be held at a time and place specified in the notice and advertisement under the chairmanship of a person nominated by the trustee or such other person as is appointed in that behalf by the holders of those debentures present at the meeting. (2) Where after the date of the commencement of this Act any debenture (other than a debenture lawfully issued pursuant to a trust deed executed before that date) is issued and neither the debenture nor the trust deed relating to the issue of the debenture expressly contains the limitation on the amount that the borrowing corporation may borrow and the covenants referred to in subsection (1) the corporation that issued the debenture and every officer of the corporation who is in default shall be guilty of an offence against this Act. Penalty: Two thousand ringgit.