Section 43. Prohibition of private companies to offer shares or debentures or invite to deposit mon~

1. A private company limited by shares shall not—

   • offer to the public any shares or debentures of the company;

   • allot or agree to allot any shares or debentures of the company with a view to offer such securities to the public; or

   • invite the public to deposit money with the company for fixed periods or payable at call, whether bearing or not bearing interest.

2. Unless the contrary is proved, an allotment or agreement to allot shares or debentures is presumed to such shares or debentures being offered to the public if an offer of the shares or debentures, or any of the shares or debentures, to the public is made—

   • within six months after the allotment or agreement to allot; or

   • before the receipt by the company of the whole of the consideration to be received by it in respect of the shares or debentures.

3. A company does not contravene this section if—

   • it acts in good faith in accordance with the arrangements under which it is to convert to a public company before the shares or debentures are allotted;

   • as part of the terms of the offer it undertakes to convert to a public company within a specified period, and that undertaking is complied with; or

   • the offer is made in accordance with the arrangements as prescribed by the Securities Commission to any person on a stock market, derivatives market, exempt stock market or exempt derivatives market that is approved, registered or regulated under the Capital Markets and Services Act 2007.

4. For the purposes of paragraph (3)(b), the specified period shall be—

   • in the case where an offer is made on the same day, a period ending not later than six months after the day on which the offer is made; or

   • in the case where an offer is made on different days, a period ending not later than six months after the day on which the offer is first made.

5. The company and every officer who contravene this section commit an offence and shall, on conviction, be liable to imprisonment for a term not exceeding five years or to a fine not exceeding three million ringgit or to both.