Bank Simpanan Nasional Berhad

Bank Simpanan Nasional Berhad

REPRINT Act 571 BANK SIMPANAN NASIONAL BERHAD ACT 1997 Incorporating all amendments up to 1 January 2006 PUBLISHED BY THE COMMISSIONER OF LAW REVISION, MALAYSIA UNDER THE AUTHORITY OF THE REVISION OF LAWS ACT 1968 IN COLLABORATION WITH PERCETAKAN NASIONAL MALAYSIA BHD 2006 2 Date of Royal Assent ... ... ... … … 7 July 1997 Date of publication in the Gazette … … 24 July 1997 PREVIOUS REPRINT First Reprint ... ... ... ... ... 2002 3 Act 571 ARRANGEMENT OF SECTIONS

PRELIMINARY

Section 1. Short title and commencement 2. Interpretation

FORMATION AND OWNERSHIP OF THE BANK

AND VESTING PROVISIONS

The Bank 4.

Vesting provisions 5. Initial Government holding in the Bank 6. Government investment in securities of the Bank 7. Exercise of the functions of the Minister through nominees

PROVISIONS RELATING TO STAFF

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Staff

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OBJECTS AND POWERS OF THE BANK

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Objects and powers of the Bank

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SUBSIDIARIES AND OFFICES OF THE BANK

Section 10. Control of establishment or acquisition of subsidiaries 11. Restriction on establishment of offices of the Bank

FINANCIAL REQUIREMENTS AND DUTIES

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Maintenance of reserve fund 13.

Maintenance of capital funds 14. Maintenance of liquid assets 15. Maintenance of assets in Malaysia 16. Investment of funds 17. Appointment of auditor 18. Duties of auditor 19. Financial statements to be submitted to Minister 20. Publication and exhibition of audited balance sheet, etc.

Statistics and information to be submitted

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OWNERSHIP, CONTROL AND MANAGEMENT

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Acquisition or disposal of aggregate of five per centum holding 23.

Maximum permissible holdings 24. Sanction required for reconstruction, etc., of the Bank 25. Bank to report acquisition or disposal of aggregate of five per centum holding to Minister 26. Credit facilities on security of Bank’s property to be reported to Minister 27. Defence relating to contravention of provisions of this Part 28. Prohibitions in the event of contravention 29. Director, controller or manager of the Bank to be fit and proper person 30. Minister’s consent required to be director of the Bank 31. Disqualifications of director or officer of the Bank 32. Appointment of chief executive 5 Bank Simpanan Nasional Berhad

RESTRICTIONS ON BUSINESS OF THE BANK

Section 33. Restrictions on payments of dividends 34. Advance against security of own shares or shares of holding company 35. Grant of secured and unsecured credit facilities 36. Restriction of credit facility to single customer 37. Prohibition of credit facilities to director and officer 38. Restriction on giving of credit facilities 39. Disclosure of interest by director 40. Control of credit limit 41. Restrictions on investments 42. Limitations, terms and conditions in respect of giving of credit facility 43. Proof of compliance

POWERS OF SUPERVISION AND CONTROL OVER

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The Bank under Minister’s supervision 45.

Examination of the Bank 46. Power of Minister to direct examination to be made 47. Production of Bank’s books, etc.

Bank unable to meet obligations to inform the Minister 49.

Action by the Minister in respect of the Bank in certain circumstances 50. Provisions in relation to an appointment under section 49 51. Provisions in relation to removal from office under paragraph 49(1)(cc) or subparagraph 49(1)(dd)(i)

Provisions relating to assumption of control under paragraph 49(2)(a)

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Power to reduce share capital and to cancel shares of the Bank when subject to an order und...

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Loans to the Bank and acquisition of its shares 55.

Extension of jurisdiction under this Part to related companies of the Bank 56. Moratorium 57. Priority of payments in the event of insolvency of the Bank 6 Laws of Malaysia

INVESTIGATION, SEARCH AND SEIZURE

Section 58. Appointment and functions of investigating officers 59. Power to search and seize 60. Search of person 61. Obstruction to exercise of powers by an investigating officer 62. Requirement to provide translation 63. Power to examine persons 64. Specific persons in respect of whom powers of investigation may be exercised 65. Assistance to police or other public officer 66. Investigating officer deemed to be public servant and public officer

INFORMATION AND SECRECY

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Restriction on inquiring specifically into affairs of particular customer 68.

Secrecy 69. Disclosure for facilitating performance of functions of Minister 70. Other permitted disclosures 71. Disclosure under Banker’s Books (Evidence) Act 1949

OFFENCES

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Offences in relation to entries in books, documents, etc.

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Offences by persons responsible for the Bank 74.

Defence 75. Joinder of offences 76. Power of Minister to compound offences 77. Prosecution 78. Offences to be seizable offences 79. Duty of investigating officer to make over arrested person to police 80. Attempts, preparations, abetments and conspiracies punishable as offences 81. General penalty 7 Bank Simpanan Nasional Berhad

GENERAL PROVISIONS

Section 82. Submission to Minister of information required by him 83. Indemnity 84. Control of advertisements issued by the Bank 85. Prohibition on receipt of gifts, commissions, etc.

Islamic banking or financial business 87.

Regulations 88. Appointment of persons 89. Protection under the Bills of Exchange Act 1949 90. Declaration of holidays 91. Application of the Companies Act 1965 92. Exemptions 93. Contracts not affected 94. Repeal and transitional provisions 8 Laws of Malaysia 9 Bank Simpanan Nasional Berhad Act 571 *BANK SIMPANAN NASIONAL BERHAD ACT 1997

An Act to provide for the transfer to and for the vesting of property, rights and liabilities of Bank Simpanan Nasional in a company by the name of Bank Simpanan Nasional Berhad, and its regulation; and to make provisions for other matters relating thereto. [ ] BE IT ENACTED by the Seri Paduka Baginda Yang di-Pertuan Agong with the advice and consent of the Dewan Negara and Dewan Rakyat in Parliament assembled, and by the authority of the same, as follows:

PRELIMINARY

Short title and commencement 1. This Act may be cited as the Bank Simpanan Nasional Berhad Act 1997 and shall come into force on such date as the Minister may, by notification in the Gazette, appoint. Interpretation

In this Act, unless the context otherwise requires—

“advertisement” means the disseminating or conveying of information, invitation or solicitation by any means or in any form, including by means of—

(a) publication in a newspaper, magazine, journal or other periodical;

(b) display of posters or notices;

(c) circulars, handbills, brochures, pamphlets, books or other documents; *NOTE—This Act is not yet in force. 10 Laws of Malaysia

(d) letters addressed to individuals or bodies;

(e) photographs or cinematograph films; and

(f) sound broadcasting, television or other electronic media; “agreement” means an agreement, whether formal or informal, oral or written, express or implied; “appointed date” means the date appointed under section 1; “approved company auditor” has the meaning assigned to it by subsection 4(1) of the Companies Act 1965 [Act 125]; “arrangement” means an arrangement whether formal or informal, oral or written, express or implied; “associate corporation” means a corporation where not less than twenty per centum and not more than fifty per centum of that corporation’s shares are held by another corporation, the first-mentioned corporation thereby being an associate corporation of the other corporation; “Bank” means a company under the name of Bank Simpanan Nasional Berhad incorporated under the Companies Act 1965 pursuant to section 3 and includes its offices; “Bank Simpanan Nasional” means a body corporate established under section 3 of the Bank Simpanan Nasional Act 1974 [Act 146]; “Board” means the board of directors of the Bank; “business associate” of a person includes—

(a) any banker, accountant, auditor, advocate, nominee or other person employed or appointed by such person at any time before or after the appointed date;

(b) any institution of which such person is a director, and any other director of the institution;

(c) if such person is a corporation—

(i) any director of such corporation;

(ii) any associate or related corporation of such corporation; and 11 Bank Simpanan Nasional Berhad

(iii) any business associate of such associate or related corporation as is referred to in subparagraph (ii);

(d) any person having possession of any property belonging to such person;

(e) any person indebted to such person;

(f) any person having any knowledge or information relating to the business, dealings, affairs or property of such person; and

(g) any person acting in concert with such person; “capital funds” means paid-up capital and reserves, and includes any other sources of capital as may be specified by the Minister; “Central Bank” means the Central Bank of Malaysia established by the Central Bank of Malaysia Act 1958 [Act 519]; “chief executive”, in relation to the Bank, means a person, by whatever name called, who, either individually or jointly with one or more other persons, is responsible, subject to the authority of the directors, for the conduct of the business and the administration of the Bank; “child” includes a step-child and a person adopted as a child under any written law of Malaysia or of any country, territory or place outside Malaysia, or under any custom recognized by any class or category of persons in Malaysia or in any country, territory or place outside Malaysia; “company” has the meaning assigned to it by subsection 4(1) of the Companies Act 1965; “constituent documents”, in relation to the Bank, means the memorandum of association and articles of association, rules and by-laws, partnership agreement, or other instrument, under or by which the Bank is established and its governing and administrative structure and the scope of its functions, business, powers and duties are set out, whether contained in one or more documents; “controller”, in relation to the Bank, means a person who—

(a) has an interest in more than fifty per centum of the shares of the Bank; 12 Laws of Malaysia

(b) has the power to appoint or cause to be appointed a majority of the directors of the Bank; or

(c) has the power to make or cause to be made, decisions in respect of the business or administration of the Bank, and to give effect to such decisions or cause them to be given effect to, and the word “control” shall be construed accordingly; “Corporation” means the Minister of Finance incorporated by the Minister of Finance (Incorporation) Act 1957 [Act 375]; “corporation” has the meaning assigned to it by subsection 4(1) of the Companies Act 1965; “credit facility” means—

(a) the giving of any advance, loan or other facility in whatever form or by whatever name called whereby the person to whom such advance, loan or facility is given has access, directly or indirectly, to the funds of the person giving the same;

(b) the giving of a guarantee in relation to the obligation of any person; or

(c) any other dealing or transaction as may be prescribed by the Minister; “derivative instrument” has the meaning assigned to it by section 2 of the Banking and Financial Institutions Act 1989 [Act 372]; “director” includes any person who occupies the position of a director, by whatever name called, and in particular, without prejudice to the foregoing, in the case of—

(a) a corporation, has the meaning assigned to it by the Companies Act 1965;

(b) a co-operative society, means a member of the board, or other governing body, by whatever name called, of the co-operative society;

(c) a statutory body, means a member of the board, committee, council or other governing body, by whatever name called, of the statutory body; 13 Bank Simpanan Nasional Berhad

(d) a partnership, means a partner;

(e) a sole proprietorship, means the sole proprietor; and

(f) any other body, association or group of persons, whether corporate or unincorporate, means any person having the direction and control of the management of its affairs or business; “document” includes—

(a) any letters, figures, marks, symbols, signals, inscriptions, writing, sign, caricature, picture, drawing, or other representation in any form; and

(b) any visual recording (whether of still or moving images), any sound recording, or any electronic, magnetic, mechanical or other recording, on any substance, material, thing or article; “giro service” means a current account service which permits account holders to issue payment instructions to the Bank for payment to any party or which permits the Bank to accept payments into the account of an account holder from any party; “holding company” has the meaning assigned to it by section 5 of the Companies Act 1965; “interest in a share” shall be construed as provided under subsections 6A(2) to 6A(10), inclusive, of the Companies Act 1965; “liabilities” includes debts, duties and obligations of every kind, whether present or future, or whether vested or contingent; “licensed institution” means any institution licensed under subsection 6(4) of the Banking and Financial Institutions Act 1989; “manager”, in relation to the Bank, means an officer of the Bank, by whatever name called, responsible for an office of the Bank, or for a department or a division of the Bank or of its office; “member”, in relation to the Bank, means a shareholder of the Bank; 14 Laws of Malaysia “Minister” means the Minister charged with the responsibility for finance; “office”, in relation to the Bank, includes the principal place of business, a branch, an agency, a mobile place of business, a place of business set up and maintained for a limited period only, an electronic terminal and any other place of business; “officer”, in relation to the Bank, includes any employee and the chief executive of the Bank; “person” includes any individual, corporation, statutory body, local authority, society, trade union, co-operative society, partnership and any other body, organization, association or group of persons, whether corporate or unincorporate; “person responsible for the Bank” means any person who is a director or officer of the Bank or who purports to act in any such capacity or who is in any manner or to any extent responsible for the management of the affairs of the Bank, or was assisting in such management; “premium savings certificate” means a numbered savings certificate which is redeemable either on demand or otherwise issued by the Bank for a deposit account on which dividends may or may not be payable and which may or may not participate in periodical draws held by the Bank for the award of bonus payments by way of cash or otherwise to the holders thereof; “prescribe” means prescribe by order published in the Gazette; “property” means any movable or immovable property and includes—

(a) any right, interest, title, claim, chose in action, power or privilege, whether present or future, or whether vested or contingent, in relation to any property, or which is otherwise of value;

(b) any conveyance executed for conveying, assigning, appointing, surrendering, or otherwise transferring or disposing of immovable property whereof the person executing the conveyance is proprietor or possessor or wherein he is entitled to a contingent right, either for the whole interest or for any lesser interest; 15 Bank Simpanan Nasional Berhad

(c) any security, including any stock, share, debenture and fund;

(d) any negotiable instrument, including any bank note, bearer note, Treasury bill, dividend warrant, bill of exchange, promissory note, cheque and negotiable certificate of deposit;

(e) any mortgage or charge, whether legal or equitable, guarantee, lien or pledge, whether actual or constructive, letter of hypothecation or trust receipt, indemnity, undertaking or other means of securing payment or discharge of a debt or liability, whether present or future, or whether vested or contingent; and

(f) any other tangible or intangible property; “public company” has the meaning assigned to it by subsection 4(1) of the Companies Act 1965; “related”, in relation to a corporation, means related within the meaning of section 6 of the Companies Act 1965; “relative”, in relation to a person, means—

(a) the spouse of the person;

(b) the brother or sister of the person;

(c) the brother or sister of the spouse of the person;

(d) any lineal ascendant or descendant of the person;

(e) any lineal ascendant or descendant of the spouse of the person;

(f) the spouse of any person referred to in paragraph (b), (c),

(d) or (e);

(g) any lineal descendant of a person referred to in paragraph

(b), (c) or (f);

(h) any uncle, aunt or cousin of the person, or of the spouse of the person; or

(i) any spouse, or any lineal ascendant or descendant, of the person referred to in paragraph (h); 16 Laws of Malaysia “securities” has the meaning assigned to it by subsection 2(1) of the Securities Industry Act 1983 [Act 280]; “share”, in relation to a corporation, means an issued share of the corporation and includes stock except where a distinction between stock and share is expressed or implied; “specify” means specify from time to time in writing; “subsidiary” has the meaning assigned to it by section 5 of the Companies Act 1965; “vesting date” means the date on which all property, rights and liabilities of the Bank Simpanan Nasional are transferred to and vested in the Bank as specified by the Minister in the order under subsection 4(1).

(2) For the purpose of the definition of “relative” in subsection

(1)—

(a) the adoption of any person by another under any written law of Malaysia or any country, territory or place outside Malaysia, or under any custom recognized by any class of persons in Malaysia or in any country, territory or place outside Malaysia, shall be treated as creating between the adopter and the adopted person the same natural relationship as the adoptive relationship, and other relationships in relation thereto shall be determined accordingly; and

(b) references therein to a relationship include, where relevant, a relationship by the half-blood.

(3) For the purposes of this Act—

(a) “persons acting in concert” means persons who have entered into an agreement or arrangement to—

(i) acquire jointly or severally interests in shares of a corporation for the purpose of obtaining or consolidating control of that corporation; or

(ii) act jointly for the purpose of exercising control over a corporation by means of interests in shares of that corporation already held by them jointly or severally; and 17 Bank Simpanan Nasional Berhad

(b) without prejudice to the generality of paragraph (a), the following persons shall be presumed to be persons acting in concert, unless the contrary is established:

(i) a corporation and its related and associate corporations;

(ii) a corporation and any of its directors, or the parent, child, brother or sister of any of its directors, or the spouse of any such director or of any such relative, or any related trusts;

(iii) a corporation and any pension fund established by it;

(iv) a person and any investment company, unit trust or other fund whose investments such person manages on a discretionary basis; or

(v) a financial adviser and its client which is a corporation, where the financial adviser manages on a discretionary basis the client’s funds and has ten per centum or more interest in the shares of the client.

(4) Where under any provision of this Act power is given to the Minister to require any person, or where any person is required under any provision of this Act, to submit, produce or provide to the Minister any information, statement, statistics, return or document—

(a) the Minister may specify that the information, statement, statistics, return or document shall be submitted, produced or provided within such period, at such intervals, in such manner, in such form, and in writing or by means of any visual recording (whether of still or moving images) or any sound recording, or any electronic, magnetic, mechanical, or other recording, on any substance, material, thing or article, as the Minister may set out in the specification; and

(b) such person shall not submit, produce or provide any information, statement, statistics, return or document which he knows, or has reason to believe, to be false or misleading. 18 Laws of Malaysia

FORMATION AND OWNERSHIP OF THE BANK AND

VESTING PROVISIONS The Bank 3. There shall be a company incorporated under the Companies Act 1965 under the name “Bank Simpanan Nasional Berhad”. Vesting provisions

The Minister may, by order published in the Gazette, appoint a vesting date and on that dat...

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(2) Every property vested in the Bank by virtue of subsection (1) shall be so vested in the Bank for the like title, estate or interest and on the like tenure as it was vested or held immediately before the vesting date.

(3) Every chose in action vested by virtue of subsection (1) in the Bank may, after the vesting date, be sued on, recovered or enforced by the Bank in its own name, and it shall not be necessary for the Bank or the Bank Simpanan Nasional to give notice to the person bound by the chose in action of the vesting effected by subsection (1).

(4) Every right and liability vested by virtue of subsection (1) in the Bank may, on and after the vesting date, be sued on, recovered or enforced by or against the Bank in its own name, and it shall not be necessary for the Bank or the Bank Simpanan Nasional to give notice to the person whose right or liability is affected by the vesting under subsection (1).

(5) Any pending legal proceedings by or against the Bank Simpanan Nasional which relate to any property, right or liability transferred to and vested in the Bank by virtue of subsection (1) may, on and after the vesting date, be continued by or against the Bank. 19 Bank Simpanan Nasional Berhad

(6) In the case of rights and liabilities arising under any loans which vest in the Bank on the vesting date, the Bank may enter into such arrangements or agreements over such rights and liabilities with the Government or any third party.

(7) Where by virtue of subsection (1), any property is transferred to and vested in the Bank, the provisions in Part Thirty of the National Land Code [Act 56 of 1965] shall, for the purpose of effecting the registration of such vesting, apply to the Bank as if it were a public authority.

(8) On and after the vesting date, any agreement relating to any property, rights and liabilities transferred to and vested in the Bank under subsection (1) to which the Bank Simpanan Nasional was a party immediately before the vesting date, whether in writing or not, and whether or not of such a nature that rights and liabilities thereunder could be assigned by the Bank Simpanan Nasional, shall have effect as if the Bank had been a party to the agreement. Initial Government holding in the Bank

As a consequence of the vesting in the Bank of the property, rights and liabilities under s...

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(2) Securities required to be issued in pursuance of this section shall—

(a) be issued or allotted at such times and on such terms, as to allotment, as the Minister may direct;

(b) be of such nominal value as the Minister may direct; and

(c) be issued as fully paid and treated for the purposes of the Companies Act 1965 as if they had been paid up by virtue of the payment to the Bank of their nominal value.

(3) The Minister may dispose of any securities issued or any rights to securities initially allotted to the Corporation in pursuance of this section.

(4) Any dividends or other sums received by the Corporation in right of, on the disposal of or otherwise in connection with, any securities or rights acquired by virtue of this section shall be paid into the Consolidated Fund. 20 Laws of Malaysia Government investment in securities of the Bank

The Minister may, through the Corporation, at any time, acquire—

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(a) securities of the Bank or of any subsidiary of the Bank; or

(b) rights to subscribe to any such securities.

(2) The Minister may dispose of any securities or rights acquired by the Corporation under this section.

(3) Any expenses incurred by the Corporation in consequence of the provisions of this section shall be treated as investments and be authorized under subparagraph 8(3)(a)(iv) of the Financial Procedure Act 1957 [Act 61].

(4) Any dividends or other sums received by the Corporation in right of, on the disposal of or otherwise in connection with, any securities or rights acquired under this section shall be paid into the Consolidated Fund.

(5) Stamp duty shall not be chargeable in respect of any increase in the capital of the Bank which—

(a) is effected by the issue of shares allotted at a time when the Bank is wholly owned by the Government; and

(b) is certified by the Treasury as having been effected by the issue of shares subscribed for by the Minister under paragraph (1)(a). Exercise of the functions of the Minister through nominees

The Minister may appoint such persons as he thinks fit to act as his nominees for the purpo...

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(a) securities of the Bank may be assigned under section 5 to any nominee of the Minister appointed for the purposes of that section or to any person entitled to require the issue of the securities following their initial allotment to any such nominee; and

(b) any such nominee appointed for the purposes of section 6 may acquire securities or rights in accordance with that section. 21 Bank Simpanan Nasional Berhad

(2) Any person holding any securities or rights as a nominee of the Minister by virtue of subsection (1) shall hold and deal with them on such terms and in such manner as the Minister may direct.

PROVISIONS RELATING TO STAFF

Staff

The Bank shall accept into its employment on the appointed date every person who immediatel...

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(2) Every person who opts to serve as an employee of the Bank shall be employed by the Bank on terms and conditions of service not less favourable than the terms and conditions of service to which he was entitled immediately before the appointed date.

OBJECTS AND POWERS OF THE BANK

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Without prejudice to its powers under the Companies

Act 1965, the objects and powers of the Bank shall include—

(a) promoting and mobilizing savings from the general public, particularly small savers, and fostering sound financial management of their resources so as to improve and advance their economic well-being;

(b) providing the means, facilities and infrastructure for achieving the objectives of the Bank and encouraging their effective utilization by customers for their benefit; and

(c) carrying on the general business of a modern and progressive financial services institution catering for the total financial needs of its customers. 22 Laws of Malaysia

(2) For the purposes of carrying out the objects set out in subsection (1), the Bank may—

(a) provide all types of deposit accounts including savings account, time deposit account and other similar accounts;

(b) receive and repay deposits from its customers;

(c) operate schemes for the issue and promotion of premium savings certificates and, notwithstanding any other written law to the contrary, hold, promote, organize and administer draws in respect of such premium savings certificates;

(d) grant all types of advances, loans and credit facilities to its customers;

(e) provide unit trust schemes;

(f) issue, purchase, sell and redeem securities, in its own name or on behalf of the Government; and the issue, holding and sale of such securities shall be subject to such terms and conditions as the Minister may determine at the time of the issue of such securities;

(g) deal with stocks, funds, shares, debentures, debenture stocks, bonds, obligations, securities and investments of all kinds;

(h) utilize the funds of the Bank for investments;

(i) pay interest on deposits by customers and determine the rate or rates of such interest;

(j) charge interest on loans and advances made to customers and determine the rate or rates of such interest;

(k) impose charges for any services rendered by it;

(l) collect cheques drawn by or paid by customers;

(m) provide all types of payment and collection services, including giro services, automated teller machines, debit cards, credit cards and prepaid cards;

(n) issue or pay local drafts, travellers cheques and effect transfers of moneys within Malaysia;

(o) accept from customers for safe custody securities and other articles of value; 23 Bank Simpanan Nasional Berhad

(p) give any guarantee for the payment of money or the performance of any obligation or undertaking;

(q) provide financial services based on Islamic principles;

(r) maintain accounts with banks and other financial institutions;

(s) open branches and appoint agents or correspondents within or outside Malaysia;

(t) act as agents for the Government or any State Government or other authority and for public or private bodies or persons;

(u) promote the formation of a company or participate in the promotion of a company or acquire an undertaking or part thereof;

(v) acquire or hold property for or in connection with the exercise of its powers, and develop such property;

(w) dispose of or lease or otherwise deal with the whole or any part of its undertaking or property;

(x) subject to the Minister’s approval on the recommendation of the Central Bank—

(i) provide current account;

(ii) carry out treasury operations including money market operations and deal in foreign currency;

(iii) issue or pay foreign drafts, and effect transfers of moneys outside Malaysia;

(iv) provide investment, advisory and underwriting services to customers;

(v) provide trade finance facilities;

(vi) deal in derivative instruments; and

(vii) carry out insurance business; and

(y) do such other business as the Minister may prescribe and do all such other things as are incidental or conducive to the attainment of its objects. 24 Laws of Malaysia

SUBSIDIARIES AND OFFICES OF THE BANK

Control of establishment or acquisition of subsidiaries

The Bank shall not establish or acquire any subsidiary in or outside Malaysia without the p...

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(2) Where the Bank fails to comply with subsection (1), it shall be guilty of an offence and shall on conviction be liable to a fine not exceeding five million ringgit.

(3) Where the Bank is guilty of an offence under subsection (2), any person who at the time of the commission of the offence was a person responsible for the Bank shall also be guilty of that offence and shall on conviction be liable to a fine not exceeding five million ringgit or to imprisonment for a term not exceeding five years or to both. Restriction on establishment of offices of the Bank

The Bank shall not open any office outside Malaysia without the prior written consent of th...

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(2) Where the Bank fails to comply with subsection (1), it shall be guilty of an offence and shall on conviction be liable to a fine not exceeding one million ringgit.

FINANCIAL REQUIREMENTS AND DUTIES OF

Maintenance of reserve fund

The Bank shall—

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(a) maintain a reserve fund; and 25 Bank Simpanan Nasional Berhad

(b) before declaring any dividend from its net profits of each year (after due provision being made for taxation), transfer to its reserve fund out of the net profits of each year—

(i) a sum equal to not less than forty per centum of the net profits of that year, so long as the amount of the reserve fund is less than fifty per centum of its paid-up capital; or

(ii) a sum equal to not less than twenty per centum of the net profits of that year, so long as the amount of the reserve fund is fifty per centum but less than one hundred per centum of its paid-up capital.

(2) Notwithstanding subsection (1), the Minister may specify a different portion of the net profits of each year, being either lesser or greater than the portions specified in subsection (1), to be transferred to the reserve fund of the Bank for the purpose of ensuring that the amount of the reserve fund of the Bank is sufficient for the purpose of its business and adequate in relation to its liabilities.

(3) Notwithstanding subsection (1), the reserve fund may, with the approval of the Minister and subject to such terms and conditions as the Minister may impose, be applied in paying up unissued shares to be issued to members as fully paid bonus shares.

(4) Nothing in this section shall authorize the Bank to pay dividends out of the reserve fund.

(5) Where the Bank fails to comply with subsection (1), it shall be guilty of an offence and shall on conviction be liable to a fine not exceeding one million ringgit and, in the case of a continuing offence, to a further fine not exceeding one thousand ringgit for each day during which the offence continues after conviction. Maintenance of capital funds

The Minister may require the Bank to maintain, at all times, capital funds unimpaired by lo...

26 Laws of Malaysia

(2) Where the Bank fails to comply with subsection (1), it shall be guilty of an offence and shall on conviction be liable to a fine not exceeding one million ringgit and, in the case of a continuing offence, to a further fine not exceeding one thousand ringgit for each day during which the offence continues after conviction. Maintenance of liquid assets

The Minister may specify that the Bank shall hold such minimum amount of liquid assets, or...

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(2) The minimum amount of liquid assets, or minimum average amount of liquid assets, specified under subsection (1) shall be expressed as a percentage of all or such of its liabilities incurred by its offices in Malaysia as may be set out in the specification.

(3) In a specification under subsection (1), the Minister may specify—

(a) the minimum amount of liquid assets, or minimum average amount of liquid assets;

(b) the types of assets to be classified as liquid assets; or

(c) the types of liabilities as mentioned in subsection (2) to be classified as liabilities for the Bank.

(4) In a specification under subsection (1), the Minister shall specify the period, being in any case not less than seven days, within which the Bank shall comply with the specification.

(5) The Minister may prohibit the Bank from giving any credit facilities to any person during the period in which it has failed to comply with any requirement of the specification under this section.

(6) Where the Bank fails to comply with subsection (1) or (5), it shall be guilty of an offence and shall on conviction be liable to a fine not exceeding one per centum of the shortfall for the day or each of the days to which the charge relates. 27 Bank Simpanan Nasional Berhad Maintenance of assets in Malaysia

The Minister may specify that the Bank shall hold at all times in Malaysia such minimum amo...

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(2) The minimum amount of assets to be held in Malaysia specified under subsection (1) shall be expressed as a percentage of all or such of the liabilities of the Bank in Malaysia as may be set out in the specification.

(3) In a specification under subsection (1), the Minister may specify—

(a) a minimum amount of assets to be held in Malaysia by the Bank;

(b) the types of assets to be classified as assets to be held in Malaysia by the Bank; or

(c) the types of liabilities to be classified as liabilities for the Bank.

(4) The provisions of subsection 14(4) shall apply mutatis mutandis in relation to a specification under subsection (1).

(5) Where the Bank fails to comply with subsection (1), it shall be guilty of an offence and shall on conviction be liable to a fine not exceeding one per centum of the shortfall for the day or each of the days to which the charge relates. Investment of funds

Subject to such directions or guidelines as the Minister may specify, the Bank shall, as fa...

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(a) securities of the Government and public authorities;

(b) other investment authorized by or under the Trustee Act 1949 [Act 208];

(c) loans and advances to customers for such purposes as may be approved by the Board; and 28 Laws of Malaysia

(d) other securities and investments as the Board may, from time to time, decide.

(2) The Bank may, with the prior written approval of the Minister, invest outside Malaysia. Appointment of auditor

Notwithstanding anything in any other written law, the

Bank shall appoint each year before a date to be specified by the Minister an auditor approved by the Minister.

(2) Where the Bank fails to appoint an auditor under subsection (1) before the date specified thereunder, the Minister may appoint for the Bank an auditor and specify his remuneration and expenses, and the same shall be paid to such auditor by the Bank.

(3) If the Minister at any time considers it desirable that another auditor should act with the auditor appointed under subsection (1) or (2), he may appoint another auditor and specify his remuneration and expenses, and the same shall be paid to such auditor by the Bank.

(4) The Bank shall not knowingly appoint as its auditor any person, and no person shall knowingly consent to be appointed as an auditor of the Bank by the Bank or by the Minister; if such person—

(a) is not an approved company auditor;

(b) has any interest in any form or of any description in the Bank, including an interest in the shares of the Bank;

(c) is a director, controller or officer of the Bank;

(d) is indebted to the Bank or to any related corporation of the Bank;

(e) is a partner, employer or employee of a director, controller or officer, of the Bank;

(f) is a partner or employee of an employee of a director, controller or officer, of the Bank;

(g) is a shareholder, or his spouse is a shareholder, of a corporation whose employee is an officer of the Bank; 29 Bank Simpanan Nasional Berhad

(h) is responsible, or is the partner, employer, or employee of a person responsible, for the keeping of the register of members or the register of holders of debentures of the Bank; or

(i) has been convicted of any offence under the Companies Act 1965, or of any offence under any written law involving fraud or dishonesty: Provided that the Minister may remove the disqualification under this paragraph which any auditor is subject to if the Minister is satisfied that it would not be contrary to the public interest to do so.

(5) For the purposes of subsection (4), a person shall be deemed to be an officer of the Bank—

(a) if he is an officer of a related corporation of the Bank; or

(b) except where the Minister, in the circumstances of the case, otherwise directs, if he has, at any time within the preceding period of twelve months, been an officer or promoter of the Bank or such related corporation.

(6) A firm shall not knowingly consent to be appointed, and shall not knowingly act, as auditor for the Bank and shall not prepare, for or on behalf of the Bank, any report required by this Act to be prepared by an auditor unless—

(a) all the partners of the firm resident in Malaysia are approved company auditors and, where the firm is not registered as a firm under any law for the time being in force, a return showing the full names and addresses of all the partners of the firm has been lodged with the Central Bank; and

(b) no partner is disqualified under paragraphs (4)(b) to (4)(i), inclusive, from acting as the auditor of the Bank.

(7) No person shall be appointed as auditor under this section unless he has prior to his appointment consented in writing to act as such auditor, and no firm shall be appointed as auditor under this section unless the firm has prior to the appointment consented in writing under the hand of at least one partner of the firm to act as such auditor. 30 Laws of Malaysia

(8) The appointment of a firm in the name of the firm as auditor under this section shall take effect and operate as an appointment as auditor of the Bank of the persons who are members of that firm at the time of the appointment.

(9) For the purposes of this section, a person shall not be deemed to be an officer of the Bank or its related corporation by reason only of his having been appointed an auditor of the Bank or its related corporation.

(10) Any person or firm appointed as an auditor for the Bank who, at any time after such appointment, becomes subject to any of the disqualifications mentioned in this section or in section 9 of the Companies Act 1965, shall immediately thereupon cease to be the auditor of the Bank and shall not thereafter act as its auditor or be required or permitted by the Bank to act as such.

(11) Where the Bank fails to comply with subsection (1), (2) or (3), it shall be guilty of an offence and shall on conviction be liable to a fine not exceeding one million ringgit and, in the case of a continuing offence, to a further fine not exceeding one thousand ringgit for each day during which the offence continues after conviction.

(12) Where the Bank is guilty of an offence under subsection (11), any person who at the time of the commission of the offence was a person responsible for the Bank shall also be guilty of that offence and shall on conviction be liable to a fine not exceeding one million ringgit or to imprisonment for a term not exceeding one year or to both and, in the case of a continuing offence, to a further fine not exceeding one thousand ringgit for each day during which the offence continues after conviction.

(13) Any person who fails to comply with subsection (4) or (6) shall be guilty of an offence and shall on conviction be liable to a fine not exceeding three million ringgit or to imprisonment for a term not exceeding three years or to both.

(14) Any person or firm who fails to comply with subsection (7) shall be guilty of an offence and shall on conviction be liable to a fine not exceeding one million ringgit and, in the case of a continuing offence, to a further fine not exceeding one thousand ringgit for each day during which the offence continues after conviction. 31 Bank Simpanan Nasional Berhad

(15) Any person who fails to comply with subsection (10) shall be guilty of an offence and shall on conviction be liable to a fine not exceeding three million ringgit or to imprisonment for a term not exceeding three years or to both and, in the case of a continuing offence, to a further fine not exceeding three thousand ringgit for each day during which the offence continues after conviction. Duties of auditor

The duties of an auditor appointed under subsection 17(1)

or 17(2) shall be—

(a) to carry out an audit of the accounts of the Bank; and

(b) subject to subsection 19(4), to submit a report of such audit to the members of the Bank.

(2) The report of the auditor referred to under paragraph (1)(b) shall be made in accordance with section 174 of the Companies Act 1965.

(3) The Minister may, at any time, require an auditor appointed under section 17 to—

(a) submit such additional information in relation to his audit as the Minister may specify;

(b) enlarge or extend the scope of his audit of the business and affairs of the Bank in such manner or to such extent as the Minister may specify;

(c) carry out any specific examination or establish any procedure in any particular case; or

(d) submit a report on any of the matters referred to in paragraphs (a), (b) and (c), and the Minister may specify the time within which any of such requirements shall be complied with by the auditor and specify the remuneration which the Bank shall pay to the auditor in respect thereof.

(4) The auditor shall comply with any requirement of the Minister under subsection (3) and the Bank shall pay to the auditor the remuneration of the auditor referred to therein. 32 Laws of Malaysia

(5) If an auditor appointed under this section, in the course of his duties as an auditor of the Bank, is satisfied that—

(a) there has been a contravention of any provision of this Act or that any offence which relates to dishonesty or fraud under any other law has been committed by the Bank or by any other person;

(b) losses have been incurred by the Bank which reduce its capital funds to an extent that the Bank is no longer able to comply with the requirements of the Minister under subsection 13(1);

(c) any irregularity which jeopardizes the interests of depositors or creditors of the Bank, or any other serious irregularity, has occurred; or

(d) he is unable to confirm that the claims of depositors or creditors are covered by the assets of the Bank, he shall immediately report the matter to the Minister.

(6) The Bank, and any director, controller or officer of the Bank, shall—

(a) furnish to an auditor appointed under this section—

(i) all information within its or his knowledge or capable of being obtained by it or by him; or

(ii) any information which the auditor requires, to enable him to carry out his duties; and

(b) ensure that all information which is furnished to the auditor, including information furnished under paragraph

(a), is not false or misleading in any material particular.

(7) The Minister may at any time examine the books, other documents, accounts and transactions of any person which was at any time, or is, an auditor of the Bank and for the purposes of such examination, the Minister shall have and may exercise all such powers as he has or may exercise in relation to an examination of the Bank under this Act.

(8) Any person who fails to comply with subsection (4), (5) or

(6) shall be guilty of an offence and shall on conviction be liable to a fine not exceeding three million ringgit or to imprisonment 33 Bank Simpanan Nasional Berhad for a term not exceeding three years or to both, and in the case of a continuing offence, to a further fine not exceeding three thousand ringgit for each day during which the offence continues after conviction. Financial statements to be submitted to Minister

Within three months after the close of each financial year of the Bank, or such further per...

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(a) its latest audited annual balance sheet, profit and loss account and statement setting out the sources of its funds, the purposes for which, and the manner in which, such funds have been utilized; and

(b) the report of—

(i) the auditor under paragraph 18(1)(b); and

(ii) the directors under subsection 169(5) of the Companies Act 1965.

(2) Within the time stipulated in subsection (1), the Bank shall, in addition to the requirements under subsection (1), submit to the Minister where the Bank has offices or subsidiaries outside Malaysia, all the documents referred to under subsection (1) in respect of—

(a) its operations in each country outside Malaysia; and

(b) its entire operations both in and outside Malaysia on a consolidated basis.

(3) The Minister may, either before or after the Bank has complied with the requirements of subsection (1) or (2), require the Bank to submit further or additional information as he may deem necessary either by way of explanation, amplification or otherwise with regard to any documents submitted under subsection (1) or (2), as the case may be, or to amend or modify the documents as to form or content as the Minister may deem appropriate.

(4) Unless and until the Minister has informed the Bank in writing that—

(a) the Minister is satisfied that the Bank has complied with the provisions of subsections (1) and (3); and 34 Laws of Malaysia

(b) the documents and information supplied thereunder are in such form and contain such information as is acceptable to the Minister, the Bank shall not— (aa) lay its accounts before its general meeting; (bb) publish the account under section 20; or

(cc) take such other action in relation thereto as the Minister may specify, except where the Minister otherwise approves in writing, and any such approval may be made subject to such terms and conditions as may be set out therein.

(5) Subject to subsection (4), the Bank shall within six months after the close of its financial year, or such further period as the Minister may approve, submit to the Minister four copies each of the documents mentioned in subsection (1) together with the approval or other decision of the annual general meeting of the Bank in respect thereof.

(6) Where the Bank fails to comply with subsection (1), (2), (3) or (5), it shall be guilty of an offence and shall on conviction be liable to a fine not exceeding one million ringgit and, in the case of a continuing offence, to a further fine not exceeding one thousand ringgit for each day during which the offence continues after conviction.

(7) Where the Bank fails to comply with subsection (4), it shall be guilty of an offence and shall on conviction be liable to a fine not exceeding one million ringgit. Publication and exhibition of audited balance sheet, etc.

The Bank shall within fourteen days of the laying of its accounts at its annual general mee...

English, and exhibit thereafter throughout the year in a conspicuous position at every office in Malaysia of the Bank, a copy each of its balance sheet and such other documents as the Minister may specify; and the Minister may specify differently in respect of the documents to be published in the newspapers and the documents to be exhibited. 35 Bank Simpanan Nasional Berhad

(2) Where the Bank fails to comply with subsection (1), it shall be guilty of an offence and shall on conviction be liable to a fine not exceeding one million ringgit and, in the case of a continuing offence, to a further fine not exceeding one thousand ringgit for each day during which the offence continues after conviction. Statistics and information to be submitted

The Bank shall submit to the Minister—

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(a) a statement showing the assets and liabilities of the Bank in Malaysia; and

(b) such further information, documents, statistics or returns as the Minister may specify.

(2) Where the Bank operates any office outside Malaysia, the Bank shall submit to the Minister such information relating to the operations of such office as may be specified by the Minister.

(3) Any information received from the Bank under this section shall be regarded as secret.

(4) Where the Bank fails to comply with subsection (1) or (2), it shall be guilty of an offence and shall on conviction be liable to a fine not exceeding one million ringgit and, in the case of a continuing offence, to a further fine not exceeding one thousand ringgit for each day during which the offence continues after conviction.

OWNERSHIP, CONTROL AND MANAGEMENT

Acquisition or disposal of aggregate of five per centum holding

Without prejudice to section 24, and subject to section 23, no person shall enter into any...

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(a) acquire, together with any interests in the shares of the Bank which were then already held by him, or by him and by persons acting in concert with him; or 36 Laws of Malaysia

(b) dispose, together with the interests in the shares previously disposed by him to any single person or any persons acting in concert, to such single person or such persons acting in concert, an aggregate interest in shares of not less than five per centum of the shares of the Bank, without obtaining the prior written approval of the Minister to enter into such agreement or arrangement: Provided that no such approval shall be granted in respect of any acquisition or disposal which would result in a contravention of section 24.

(2) An application for approval under subsection (1) shall be made by the person intending to acquire or dispose of any interest in shares referred to therein and shall be submitted to the Minister.

(3) No person who has obtained the approval of the Minister under subsection (1) to enter into an agreement or arrangement—

(a) for the acquisition of any interest in the shares of the Bank, shall enter into any subsequent agreement or arrangement to acquire any interest in the shares of the Bank; or

(b) for the disposal of any interest in the shares of the Bank to a single person or to persons acting in concert, shall enter into any subsequent agreement or arrangement with such single person or with one or more of such persons acting in concert, to dispose to him or to them, any interest in the shares of the Bank, regardless of the percentage of the shares of the Bank which such interest in the shares represents, without obtaining the prior written approval of the Minister to enter into such subsequent agreement or arrangement, and the provisions of subsection (2) shall apply to an application for approval under this subsection.

(4) Any person who fails to comply with subsection (1) or (3) shall be guilty of an offence and shall on conviction be liable to a fine not exceeding five million ringgit or to imprisonment for a term not exceeding five years or to both. 37 Bank Simpanan Nasional Berhad Maximum permissible holdings

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(a) in the case of an individual, ten per centum; and

(b) in the case of a person other than an individual, twenty per centum, except where the Minister, on being satisfied that it would not be— (aa) prejudicial to the promotion of a sound financial structure in Malaysia; and (bb) contrary to public interest to do so, otherwise approves.

(2) For the purpose of paragraph (1)(a), where the person holding interests in the shares of the Bank is a corporation in which—

(a) an individual;

(b) that individual’s spouse; or

(c) that individual’s child, holds, or any two or more of the persons mentioned in paragraphs

(a), (b) and (c) hold, severally or jointly, interests in shares of not less than seventy-five per centum of the shares of that corporation, such corporation shall be deemed to be an individual.

(3) For the purposes of this section, in computing the holding of a person, the following shall be deemed to be the holding of such person and added on to his own holding:

(a) where a person is an individual, the holding of his or her spouse, child or family corporation;

(b) where a person is a corporation, the holding of its related or associate corporations;

(c) where a person is a co-operative society, the holding of its subsidiaries as defined in section 2 of the Co-operative Societies Act 1993 [Act 502], and of related or associate corporations of such subsidiaries; and

(d) the holding of persons acting in concert with such person. 38 Laws of Malaysia

(4) For the purposes of paragraph (3)(a), a “family corporation” means a corporation in which—

(a) an individual;

(b) that individual’s spouse; or

(c) that individual’s child, holds, or any two or more of the persons mentioned in paragraphs

(a), (b) and (c) hold, severally or jointly, interests in the shares of more than fifty per centum of the shares of the corporation.

(5) Any individual who holds ten or more than ten per centum interest in the shares of the Bank, or any person other than an individual who holds twenty or more than twenty per centum interest in the shares of the Bank, shall, prior to disposing of any interest in the shares of the Bank, notify the Minister in writing of such intended disposal and shall continue to notify the Minister of any further intended disposal so long as such individual or other person holds not less than five per centum interest in the shares of the Bank.

(6) The Minister may, at any time by notice in writing, require any person to submit—

(a) any information or particulars of any interest in the shares of the Bank acquired or held directly or indirectly either for his own benefit or for the benefit of any other person; or

(b) a statement of his current holding of interest in the shares of the Bank.

(7) Any person who has been served with a notice under subsection (6) shall, within seven days of the receipt of such notice or such longer period as may be allowed by the Minister in any particular case, submit to the Minister all the necessary information or particulars, or the statement, as the case may be, as required by the Minister, duly verified by a statutory declaration.

(8) Any person who fails to comply with subsection (1) shall be guilty of an offence and shall on conviction be liable to a fine not exceeding five million ringgit or to imprisonment for a term not exceeding five years or to both and, in the case of a continuing offence, to a further fine not exceeding fifty thousand ringgit for each day during which the offence continues after conviction. 39 Bank Simpanan Nasional Berhad Sanction required for reconstruction, etc., of the Bank

No person shall enter into an agreement or arrangement—

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(a) which will result in a change in the control of the Bank or its holding company;

(b) for the sale, disposal, or transfer of the whole or any part of the business of the Bank;

(c) for the amalgamation or merger of the Bank with any other person; or

(d) for the reconstruction of the Bank, unless—

(i) the proposed agreement or arrangement is in writing; and

(ii) all the parties thereto have first made an application in writing to the Minister for his approval of such agreement or arrangement and have obtained the Minister’s approval thereto.

(2) For the purposes of this section, “business” means any activity carried on for the purpose of gain or profit and includes all property derived from, or used in or for the purpose of, carrying on such activity and all rights and liabilities arising from such activity.

(3) Any person who fails to comply with subsection (1) shall be guilty of an offence and shall on conviction be liable to a fine not exceeding ten million ringgit or to imprisonment for a term not exceeding ten years or to both. Bank to report acquisition or disposal of aggregate of five per centum holding to Minister

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(2) Where the Bank fails to comply with subsection (1), it shall be guilty of an offence and shall on conviction be liable to a fine not exceeding five million ringgit and, in the case of a continuing offence, to a further fine not exceeding five thousand ringgit for each day during which the offence continues after conviction. 40 Laws of Malaysia

(3) Where the Bank is guilty of an offence under subsection (2), any person who at the time of the commission of the offence was a person responsible for the Bank shall also be guilty of that offence and shall on conviction be liable to a fine not exceeding five million ringgit or to imprisonment for a term not exceeding five years or to both and, in the case of a continuing offence, to a further fine not exceeding five thousand ringgit for each day during which the offence continues after conviction. Credit facilities on security of Bank’s property to be reported to Minister

Where any person proposes to give any credit facility to any person on the security of any...

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(2) Where the Bank proposes to provide its property as security in respect of a credit facility to be given by any person to the Bank or to any other person, it shall, before doing so, submit a report on the matter to the Minister.

(3) The report required to be submitted under subsection (1) or

(2) shall contain all relevant details and particulars of the transaction and shall, in any case, include the following:

(a) the names and addresses of the persons to whom the credit facility is proposed to be given;

(b) details of the property to be provided as security for the proposed credit facility; and

(c) the amount of the proposed credit facility.

(4) Any person who fails to comply with subsection (1) or (2) shall be guilty of an offence and shall on conviction be liable to a fine not exceeding five million ringgit or to imprisonment for a term not exceeding five years or to both and, in the case of a continuing offence, to a further fine not exceeding five thousand ringgit for each day during which the offence continues after conviction. 41 Bank Simpanan Nasional Berhad Defence relating to contravention of provisions of this Part 27. It shall be a defence to a charge for an offence relating to a contravention of section 22, 23, 24 or 26 for the accused to prove that he had no knowledge of the acts, omissions, facts or circumstances constituting the contravention, provided he had reported the contravention to the Minister within seven days of becoming aware of such acts, omissions, facts or circumstances which constituted such contravention. Prohibitions in the event of contravention

Where the Minister is satisfied that any person has contravened the provisions of section 2...

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(a) in respect of any shares which are the subject of the contravention, a prohibition on—

(i) the transfer of, or the carrying out of the agreement to transfer, such shares, or, in the case of unissued shares, the transfer of, or the carrying out of the agreement to transfer, the right to be issued with them;

(ii) the exercise of any voting rights in respect of such shares;

(iii) the issue of any further shares in right of such shares or in pursuance of any offer made to their holder; or

(iv) except in a liquidation, the payment of any sums due from the Bank on such shares, whether in respect of capital or otherwise; or

(b) in respect of a contravention of section 26, a prohibition on the exercise of any right under any security, or right to transfer any property constituting such security.

(2) A preliminary order under subsection (1) shall be served on the defaulting person as soon as practicable, and may be publicized in such manner as the Minister deems fit, if, in the opinion of the Minister, it needs to be publicized. 42 Laws of Malaysia

(3) A preliminary order shall be binding on the defaulting person, on any person for the time being holding any shares to which such order applies, and on any other person specified in the order or to whom the order is directed.

(4) Any person holding any shares to which a preliminary order applies shall within seven days after its service on the defaulting person, or such longer period as the Minister may allow, surrender such shares to the Minister.

(5) No person shall be given an opportunity of being heard before the Minister makes a preliminary order under subsection

(1) against him or which affects him in any manner.

(6) Any defaulting person against whom a preliminary order has been made, or any other person prejudicially affected by such order, may, within fourteen days of the service of the order on the defaulting person, make representations in writing to the Minister applying for a revocation of the order on the ground that he had not contravened the provisions in relation to which the order has been made, or for a modification of the order on the ground that it would be just and proper to modify it for reasons to be specified in the representations.

(7) The Minister may, after considering the representations made under subsection (6), either confirm the preliminary order, or revoke it, or vary it in such manner as he deems fit.

(8) Where the Minister confirms a preliminary order, he may dispose of the shares surrendered to him under subsection (4) to such persons and to such extent as shall be consistent with the shares being held lawfully by the purchaser under this Act.

(9) The proceeds of the disposal of the shares under subsection

(8) shall be paid into the High Court, and any person claiming to be beneficially entitled to the whole or any part of such proceeds may, within thirty days of such payment into the High Court, apply to a judge of the High Court in chambers for payment out of the proceeds to him.

(10) The Minister may give any instructions or directions to the directors or officers of the Bank as may be necessary or requisite to give effect to any order of the Minister under this section, or as may be incidental, ancillary or consequential to such order. 43 Bank Simpanan Nasional Berhad

(11) Any transaction, including any agreement or arrangement in relation to any shares, or interest in shares, or security, which is in contravention of any preliminary order, or of any order confirmed under subsection (7), or of any instruction or direction given by the Minister under subsection (10), shall be void and of no effect.

(12) The satisfaction of the Minister under subsection (1) that any of the provisions of this Act referred to therein have been contravened by any person may be arrived at regardless as to whether or not there is any prosecution of any person for such contravention.

(13) Any person who fails to comply with subsection (1) shall be guilty of an offence and shall on conviction be liable to a fine not exceeding five million ringgit or to imprisonment for a term not exceeding five years or to both.

(14) Any person who fails to comply with subsection (5) shall be guilty of an offence and shall on conviction be liable to a fine not exceeding five million ringgit or to imprisonment for a term not exceeding five years or to both and, in the case of a continuing offence, to a further fine not exceeding five thousand ringgit for each day during which the offence continues after conviction.

(15) Any person who fails to comply with subsection (10) shall be guilty of an offence and shall on conviction be liable to a fine not exceeding one million ringgit and, in the case of a continuing offence, to a further fine not exceeding one thousand ringgit for each day during which the offence continues after conviction. Director, controller or manager of the Bank to be fit and proper person

Every person who is, or is to be, a director, controller or manager of the Bank shall be a...

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(2) In determining whether a person is a fit and proper person to hold any particular position, the Bank shall have regard to his probity, competence and soundness of judgment for fulfilling the responsibilities of that position, to the diligence with which he is fulfilling or likely to fulfil those responsibilities and as to whether the interests of depositors or potential depositors, if any, of the Bank are, or are likely to be, in any way threatened by his holding that position. 44 Laws of Malaysia

(3) Without prejudice to the generality of subsection (2), the Bank may have regard to the previous conduct and activities in business or financial matters of the person in question and, in particular, to any evidence that—

(a) he has committed an offence involving fraud or other dishonesty or violence;

(b) he has contravened any provision made by or under any written law appearing to the Minister to be designed for protecting members of the public against financial loss due to dishonesty, incompetence or malpractice by persons concerned in the provision for banking, insurance, investment or other financial services or the management of companies or against financial loss due to the conduct of discharged or undischarged bankrupts;

(c) he has engaged in any business practices appearing to the Minister to be deceitful or oppressive or otherwise improper (whether unlawful or not) or which otherwise reflect discredit on his method of conducting business; or

(d) he has engaged in or been associated with any other business practices or otherwise conducted himself in such a way as to cast doubt on his competence and soundness of judgement. Minister’s consent required to be director of the Bank

No person shall accept appointment or election as a director of the Bank unless he has, pri...

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(2) Where the Minister refuses to give his consent under subsection (1), he shall notify the applicant in writing of his refusal.

(3) Any person who fails to comply with subsection (1) shall be guilty of an offence and shall on conviction be liable to a fine not exceeding three million ringgit or to imprisonment for a term not exceeding three years or to both. 45 Bank Simpanan Nasional Berhad Disqualifications of director or officer of the Bank

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(a) if he is a bankrupt, has suspended payments, or has compounded with his creditors, whether within or outside Malaysia;

(b) without prejudice to paragraph (c), if a charge for a criminal offence relating to dishonesty, fraud or violence under any written law punishable with imprisonment for one year or more, whether by itself, or in lieu of, or in addition to, a fine, has been proved against him in any court within or outside Malaysia;

(c) if a charge for any offence under this Act has been proved against him;

(d) if there has been made against him any order of detention, supervision, restricted residence, banishment or deportation, or if there has been imposed on him any form of restriction or supervision by bond or otherwise, under any law relating to prevention of crime, or to preventive detention for prevention of crime or drug trafficking, or to restricted residence, or to banishment or immigration; or

(e) if he has been a director of, or directly concerned in the management of any corporation which is being or has been wound up by a court or other authority competent to do so within or outside Malaysia, or of any licensed institution, the licence of which has been revoked under the Banking and Financial Institutions Act 1989.

(2) Where a person is subject to the disqualification under paragraph (1)(e), he may—

(a) be appointed or elected, or accept appointment or election; or

(b) notwithstanding anything in subsection (4), continue in his office, as a director, manager, secretary, or other officer concerned in the management of the Bank if the Minister is satisfied that the criteria set out in section 29 are fulfilled with respect to him. 46 Laws of Malaysia

(3) Where a person who is a director, manager, secretary, or an officer concerned in the management of the Bank, becomes subject to any of the disqualifications mentioned in subsection (1), he shall immediately thereupon cease to hold office and act as such, and the Bank shall immediately thereupon terminate his appointment in such capacity.

(4) During the pendency of any criminal proceedings in any court for any offence as is referred to in paragraph (1)(b) or (1)(c) against any person who is a director, manager, secretary, or other officer concerned in the management of the Bank, such person shall not act in such capacity, or hold any other office, or act in any other capacity, in the Bank, or in any manner, whether directly or indirectly, be concerned with, or take part or engage, in any activity, affairs or business of or in relation to the Bank, except as may be authorized by the Minister, subject to such conditions as the Minister may impose.

(5) For the purpose of subsection (4), criminal proceedings referred to therein shall be deemed to be pending from the date that the accused person is first charged in court for the offence until the date of the final conclusion of the proceedings, whether in the court of original jurisdiction or, in the event of any appeal by any party, in the court of final appellate jurisdiction.

(6) Any person who fails to comply with subsection (1) shall be guilty of an offence and shall on conviction be liable to a fine not exceeding three million ringgit or to imprisonment for a term not exceeding three years or to both.