Corporate Governance

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Legal framework of corporate governance (Laws and regulations affecting corporations) Companies Act 1965
All types of incorporated companies, whether private or public, foreign or otherwise, unless formed in pursuance of some other written laws are governed under CA 1965. The Act governs matters regarding powers of the Registrar of Companies, filing of documents with the Registrar of Companies, incorporation of companies, constitution of companies, powers of companies, shares and membership, debentures, interests other than shares and debentures, registration of charges, mgt and administration of a co, officers of co, accounting and auditing of a co, receivership and winding up. The purpose of the Act is also to enhance corporate governance and thus it regulates the conduct and rights of participants dealing with the company, namely the promoters, creditors, members, company secretary, auditors, directors and other officers of the company, receivers, managers and liquidators. Companies Regulations 1966 is one of subsidiary legislation of CA 1965 under power conferred by S373 of CA1965. It governs, amongst other matters, rules relating to statutory forms other documents, notice by substantial sholder pursuant to S 69E, 69F or 69G of CA1965,application for extension of time to hold annual general meeting, share buy-back & meeting of debenture holders. The statutory forms often quoted throughtout this book may be found in the 2nd Schedule of Companies Regulations 1966. Companies (Reduction of Capital) Rules 1972 is one of the subsidiary legislations of CA 1965 made under, S 373 Of CA 1965. It sets the rules governing the reduction of capital of companies under S 64 of CA 1965. Statutory forms in relation to the reduction of capital may be found in the Schedule of the Rules. Companies (Winding Up) Rules 1972 is one of the subsidiary legislations of the Companies Act 1965 made under the powers conferred by S 372 of CA 1965 and S 16 of the Courts Judicature Act 1964. It governs matters relating to proceedings in the winding up of companies, including petition, hearing of petition, powers and duties of liquidator official receiver, special manager, statement of affairs, meeting of creditors and contributories, collection and distribution of assets, return of capital, accounts and audit. Statutory forms and statement of affairs in relation to the winding up rules may be found in First Schedule of the Rules. Security Commission Act 1993 (and its later amendments) establishes the Securities Commission and empowers the Commission with regards to compliance of securities law in Malaysia. It regulates the 'primary' capital market and sets rules regarding corporate proposals and conduct of participants in such schemes. Corporate proposals include proposals for a public company to offer for subscription or purchase, list of securities on a securities exchange whether in Malaysia or outside Malaysia, make a bonus issue (other than through the capitalisation of revenue reserves), schemes of amalgamations & acquisition, issue of an employee share or employee share option scheme, schemes of acquisition or disposal of assets which will significantly change the business direction of a listed public company. The Malaysian Code on Takeovers and Mergers 1998 is made under S 33A(1) of Securities Commission Act. The Code regulates the conduct of a person who acquires or proposes to acquire control of more than 33'/0 voting shares in a public company and such private company as the Securities Commission may determine. The purpose of the Code is also to protect minority interest and enhance transparency in takeovers and mergers transactions. It regulates the conduct and rights of participants dealing and affected by takeovers and mergers of companies, namely the acquirer, the target, minority shareholders, advisors and board of directors. The Code includes requirements to comply with the Guidelines and Practice Notes issued by the...
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