Section 179. Contents of trust deed

(1) Where a corporation offers debentures to the public for subscription in Malaysia, the debentures or the relevant trust deed shall contain a limitation on the amount that the borrowing corporation may borrow and shall contain covenants by the borrowing corporation which shall have the following effects:

(a) the borrowing corporation shall use its best endeavours to carry on and conduct its business in a proper and efficient manner;

(b) to the same extent as if the trustee for the debenture holders or any approved company auditor appointed by the trustee were a director of the corporation, the borrowing corporation shall—

(i) make available for inspection all accounting or other records of the borrowing corporation; and

(ii) give to the borrowing corporation any information as the borrowing corporation requires with respect to all matters relating to the accounting or other records of the borrowing corporation; and

(c) on the application of persons holding not less than ten per centum in value of the issued debentures to which the covenant relates delivered to its registered office, the borrowing corporation shall—

(i) summon a meeting of the debenture holders to consider the accounts and balance sheet which were last lodged with the trustee for the debenture holders by the borrowing corporation; and

(ii) give to the trustee directions in relation to the exercise of the trustee’s powers, such meeting to be held at a time and place specified in the notice and advertisement under the chairpersonship of a person nominated by the trustee or such other person as is appointed in that behalf by the debenture holders present at the meeting.

(2) The notice of the meeting referred to in paragraph (1)(c) shall be—

(a) given to each of the debenture holders, other than debentures payable to bearer, at his address as specified in the register of debentures; and

(b) by an advertisement in at least one widely circulated newspaper in Malaysia in the national language and one widely circulated newspaper in Malaysia in the English language addressed to all debenture holders.

(3) If the debentures or the trust deed does not expressly contain covenants by the borrowing corporation, the debentures or the trust deed shall be deemed to contain the covenants as mentioned in subsection (1).

(4) The corporation and every officer who contravene this section commit an offence and shall, on conviction, be liable to a fine not exceeding one million ringgit.