Section 132. Distribution only if company is solvent

(1) Before a distribution is made by a company to any shareholder, such distribution shall be authorized by the directors of the company.

(2) The directors may authorize a distribution at such time and in such amount as the directors consider appropriate, if the directors are satisfied that the company will be solvent immediately after the distribution is made.

(3) For the purposes of this section, the company is regarded as solvent if the company is able to pay its debts as and when the debts become due within twelve months immediately after the distribution is made.

(4) If, after a distribution is authorized and before it is made, the directors cease to be satisfied on reasonable grounds that the company will be solvent immediately after the distribution is made, the directors shall take all necessary steps to prevent the distribution from being made.

(5) Without prejudice to any other liability, every director or officer of the company who wilfully pays or permits to be paid or authorizes the payment of any improper or unlawful distribution shall, on conviction, be liable to imprisonment for a term not exceeding five years or a fine not exceeding three million ringgit or to both.