News
Bankruptcy
The Malaysian Bankruptcy Act 1967 was amended
in the year 2003 and came into force on 1 October
2003.
Changes brought about by the new amendment
include:
- A change in the title of the Official Assignee
Malaysia to the Director-General of Insolvency
Malaysia (DGI);
- Inclusion of a definition of 'social guarantor';
- A requirement for a petitioning creditor to
prove to the Court that he or she
had exhausted all avenues
to recover debts owed to him or her
by the debtor
before he or she can commence any bankruptcy
action against a 'social guarantor'.
- An increase in the minimum debt which enables
a person to be declared bankrupt
from RM10,000
to RM30,000;
- Enabling the DGI to give the creditor/s a notice
of his or her intention
to issue a certificate
of discharge to a bankrupt without
having to give any reason;
- Stopping the calculation of the rate of interest
on the date
of the receiving
order granted
by the court in cases where the
interest is not
reserved
or agreed upon;
- Conferring powers of a Commissioner of Police
to the DGI and the
powers of a police officer
on the investigation officers
to facilitate investigation,
prosecution
and enforcement;
- An increase from RM100 to RM1000 as the minimum
amount
that cannot
be borrowed
by an undischarged
bankrupt without informing
the person who gives the
credit or
loan that
he or she is an undischarged
bankrupt.
Corporate Insolvency
The DGI and the Ministry of Domestic Trade and
Consumer Affairs are in the process of setting
up a committee to work together on reviewing Part
10 of the Companies Act 1965.
- Bankruptcy Act 1967
-
Parts 7,8, 10 of the Companies Act 1967
Personal
Insolvency Procedures
The
personal insolvency procedures that
apply in Malaysia are contained in
the Bankruptcy Act 1967. A debtor can
become bankrupt through either a debtor's
petition or a creditor's petition.
There is a summary administration available
for small bankruptcies. A debtor can
also avail himself/herself of a composition
or a scheme as an alternative to bankruptcy.
The Official Assignee administers all
personal insolvency administrations.
Corporate
Insolvency Procedures
The following insolvency procedures
are available under the Companies
Act 1965:
- Pt 7 Arrangements and Reconstructions
- Pt 8 Receivers and Managers
- Pt 10 Winding Up.
Winding-up can be a court
procedure or
a voluntary procedures
(under
the control of
members
for a solvent company
or under
the control of
creditors for an
insolvent
company).
Private practitioners
can be appointed
by, in windings-up,
for instance,
the Official Receiver
can act as
a liquidator
and is a default
liquidator if
no
other liquidator
is acting.
Part 10 of
the Act
will be reviewed
in
the near
future.
Role
played by Government
The
Official Assignee (a government official) is responsible
for administering all personal insolvency procedures.
The Official Receiver (a government official) can
act as a liquidator of companies being wound-up
and is appointed by default if no other liquidator
is acting. The Official Receiver also supervises
the activities of private sector liquidators appointed
by the court.
Role
played by private sector practitioners
Private sector practitioners are not appointed
to personal insolvencies.
Private sector practitioners may take on corporate
insolvency appointments although the Official Receiver
may also act as a liquidator.
Role
played by the Court
The general powers of the Court in Bankruptcy
are included in s91 of the Bankruptcy Act 1967.
The Court has a general oversight role in relation
to corporate insolvency procedures, especially
where the court has appointed a liquidator. In
windings-up generally, the court has power to remove
a liquidator and appoint another (s266) and review
a liquidator's remuneration (s267).
Does
the insolvency system in Malaysia allow
for:
1.
|
Different
procedures for the insolvency of individuals
and the insolvency of companies? |
|
 |
2.
|
Creditors
to accept an arrangement outside of formal
bankruptcy/liquidation proceedings? |
|
|
3.
|
Priority
payment for employee creditors? |
|
|
4.
|
Priority
payment for taxation debts? |
|
|
5.
|
Automatic
disqualification of directors of failed companies
from managing other companies? |
|
|
6.
|
Recognition
of insolvency proceedings being conducted
in another jurisdiction? |
|
|
7.
|
A
government agency to undertake insolvency
administration work? |
|
|
8.
|
Some
form of licensing of private sector practitioners? |
|
|
9.
|
A
review of the remuneration claimed by an
insolvency practitioner by either a court
or other government regulator? |
|
|
10.
|
A
mandatory scale of fees applicable to insolvency
practitioner remuneration? |
|
|
11.
|
Surveillance
of the work of private sector practitioners
by a government regulator? |
|
|
12.
|
Collation
of insolvency statistics by a government
regulator? |
|
|
|
