Section 158. Invitations to the public to lend money to or to deposit money with a corporation

(1) An invitation to the public to deposit money with or lend money to a corporation or proposed corporation shall not be issued, circulated or distributed by the corporation or by any other person unless a prospectus in relation to the invitation has been registered by the Registrar under sections 154 and 155.

(2) For the purposes of this Division, any corporation which accepts or agrees to accept from any person any money on deposit or loan shall be deemed to make an invitation to the public to deposit money with or lend money to the corporation or proposed corporation.

(3) Notwithstanding subsection (2), a corporation is not required to issue a prospectus if—

(a) the corporation is not under a present or future liability to repay any money accepted by the corporation on deposit or loan from more than ten persons; or

(b) any money accepted by the corporation on deposit or loan is fully guaranteed by the Government.

(4) If a corporation has accepted from any person any money as a deposit or loan upon an invitation referred to in subsection (1), the corporation shall, within two months after the acceptance of the money, issue to that person a document which—

(a) acknowledges or evidences or constitutes an acknowledgement of the indebtedness of the corporation in respect of that deposit or loan; and

(b) complies with the other requirements of this section.

(5) The document shall be described or referred to in the prospectus and in any other document, whether constituting or relating to the invitation and in the document itself, as an unsecured note or an unsecured deposit note unless the document is and may be otherwise described under subsection (6) or (7).

(6) The document may be described or referred to in the prospectus or in such other document or in the document itself as—

(a) a mortgage debenture or certificate of mortgage debenture stock unless there is included in the prospectus the statements and the valuation referred to in the First Schedule; or

(b) a debenture or certificate of debenture stock unless—

(i) the document may be, but is not, described or referred to in that prospectus or document as a mortgage debenture or certificate of mortgage debenture stock under paragraph (a); or

(ii) there is included in the prospectus the statement and the summary referred to in the First Schedule.

(7) This section shall not apply to a prescribed corporation and shall not require a prospectus to be issued in connection with any invitation to the public to deposit money with a prescribed corporation.

(8) In this section, “prescribed corporation” means—

(a) a banking corporation; or

(b) a corporation or a corporation of a class which, on the recommendation of the Central Bank of Malaysia, has been declared by the Minister charged with the responsibility for finance by notice in the Gazette to be a prescribed corporation for the purposes of this section.

(9) The Minister charged with the responsibility for finance may, by notice published in the Gazette—

(a) specify terms and conditions subject to which subsection (7) shall have effect in relation to a corporation specified in paragraph (8)(b); or

(b) vary or revoke any declaration or specification made under this section.

(10) For the purposes of this section, a document issued by a borrowing corporation certifying that a person named in the document in respect of any deposit with or loan to the corporation, the registered holder of a specified number or value—

(a) of unsecured notes or unsecured deposit notes;

(b) of mortgage debentures or mortgage debenture stock; or

(c) of debentures or debenture stock,

issued by the corporation upon or subject to the terms and conditions contained in a trust deed referred to or identified in the certificate, the document shall be deemed to be a document evidencing the indebtedness of that corporation in respect of that deposit or loan.

(11) The corporation 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.