ACT 125

Section 363. Restriction on offering shares, debentures, etc. for subscription or purchase.
(1) A person shall not, whether by appointment or otherwise, go from place to place—

    (a) offering shares for subscription or purchase to the public or any member of the public; or

    (b) seeking or receiving offers to subscribe for or to purchase shares from the public or from any member of the public:

Provided that this section shall not apply to an offer for subscription or purchase or invitation to subscribe for or purchase or recommendation to which the Securities Commission Act 1993 applies.

(2) Subsection (1) shall not apply in the case of the shares of any corporation which, after notice of intention in the form prescribed to apply for exemption from subsection (1) has been advertised in a newspaper circulating generally throughout Malaysia, has applied to the Yang di-Pertuan Agong for exemption and the application has on the recommendation of the Minister been granted, but the exemption may at any time be revoked by order of the Yang di-Pertuan Agong.

(3) A person shall not make an offer to the public or to any member of the public (not being a person whose ordinary business it is to buy or sell shares, whether as principal or agent) of any shares for purchase.

(4) Subsection (3) shall not apply—

    (a) where the shares to which the offer relates are shares of a class which are quoted on, or in respect of which permission to deal has been granted by, any prescribed Stock Exchange and the offer so states and specifies the Stock Exchange;

    (b) where the shares to which the offer relates are shares which a corporation has allotted or agreed to allot with a view to their being offered for sale to the public and the offer is accompanied by a document that complies with all enactments and rules of law as to prospectuses;

    (c) to any application for shares in or debentures of a corporation or to any invitation to deposit money with or lend money to a corporation which is issued, circulated, distributed or made subject to and in accordance with Division 1 of Part IV in accordance with the provisions of Division 3 of Part IV of the Securities Commission Act 1993;

    (d) where the offer relates to—

      (i) an interest to which Division 5 of Part IV applies and is accompanied by a statement in writing as required by that Division; or

      (ii) deposits or loans to a corporation of the kind referred to in subsection 38(6); or

    (e) to any advice as to the price at which a management company is prepared to buy or sell any interest to which Division 5 of Part IV applies given or sent by the management company to any person to whom the management company has given or sent a statement in writing relating to that interest which complies with that Division within the period of six months immediately preceding the giving or sending of the advice.

(5) Every person who acts, or incites, causes or procures any person to act, in contravention of this section shall be guilty of an offence against this Act.

Penalty: Imprisonment for ten years or two hundred and fifty thousand ringgit or both.

(6) Where a person convicted of an offence under this section is a corporation, every officer concerned in the management of the corporation shall be guilty of the like offence unless he proves that the act constituting the offence took place without his knowledge or consent.

(7) Where any person is convicted of having made an offer in contravention of this section, the court before which he is convicted may order that any contract made as a result of the offer shall be void and may give such consequential directions as it thinks proper for the repayment of any money or the retransfer of any shares;

and an appeal against the order and any consequential directions shall lie to the Court.

(8) Subject to this section a person shall not make any oral invitation or offer to the public or to any member of the public to subscribe for or to purchase shares.

(9) In this section—

"shares" means shares of a corporation whether a corporation in existence or to be formed and includes debentures and units and (without affecting the generality of the expression "debentures") all such documents (including those referred to as "bonds") as confer or purport to confer on the holder thereof any claim against a corporation, whether the claim is present or future or certain or contingent or ascertained or sounding only in damages and also includes any interest to which Division 5 of Part IV applies.

(10) In this section a reference to an offer or offering of shares for subscription or purchase or for purchase shall be construed as including an offer of shares by way of barter or exchange and a reference to an offer of shares shall be construed as including an offer by means of broadcasting, television or cinematograph; but where an offer is made by means of broadcasting, television or cinematograph the prospectus by which the offer is required to be accompanied by virtue of this section shall be deemed to accompany the offer if—

    (a) the prospectus is prepared by the person on whose behalf the offer is made;

    (b) the public are informed at the same time and by the same means as that by which the offer is made that a copy of the prospectus will be supplied on request being made at a specified address;

    (c) where request for a copy of a prospectus is made at that address within one month after the offer was made the person making the request is supplied with a copy within seven days after the request was made; and

    (d) the offer contains no more information or matter than the information or matter referred to in paragraphs 40(1)(a) to (f).

(11) For the purposes of subsection (1) a person shall not in relation to a corporation be regarded as not being a member of the public by reason only that he is a holder of shares in the corporation or a purchaser of goods from the corporation.