Section 123. Financial assistance by a company in dealings in its shares, etc.

(1) Unless otherwise provided in this Act, a company shall not give any financial assistance, whether directly or indirectly and whether by means of a loan, guarantee or the provision of security or otherwise, for the purpose of or in connection with a purchase or subscription made or to be made by any person of or for—

(a) any shares in the company; or

(b) in the case where the company is a subsidiary, any shares in its holding company, or in any way purchase, deal in or lend money on its own shares.

(2) Unless otherwise provided in this Act, a company shall not give financial assistance directly or indirectly for the purpose of reducing or discharging the liability, if—

(a) a person has acquired shares in the company or its holding company; and

(b) the liability has been incurred by any person for the purpose of the acquisition of the shares.

(3) Any officer of the company who contravenes subsection (1) or (2) commits an offence and shall, on conviction, be liable to a fine not exceeding three million ringgit or to imprisonment for a term not exceeding five years or to both.

(4) Where a person is convicted of an offence under this section and the Court, by which the person is convicted is satisfied that the company or another person has suffered loss or damage as a result of the contravention that constituted the offence, the Court may, in addition to imposing a penalty under subsection (3), order the convicted person to pay compensation to the company or the person, as the case may be, such amount as the Court may specify, and such order may be enforced as if it were a judgment of the Court.

(5) Nothing in this section shall operate to prevent the company or any person recovering the amount of any loan made in contravention of this section or any amount for which it becomes liable either on account of any financial assistance given or under any guarantee entered into or in respect of any security provided in contravention of this section.