Section 170. Stop order

(1) Where the prospectus has been registered by the Registrar and the Registrar is of the opinion that—

(a) a prospectus does not comply with or is not prepared in accordance with any provision of this Act;

(b) a prospectus contains a statement or information that is false or misleading;

(c) a prospectus contains a statement or information from which there is a material omission; or

(d) the corporation has contravened any provision of this Act,

the Registrar may, by stop order in writing served on the corporation or such other person as the Registrar may determine, direct the corporation or such other person not to allot, issue, offer, make an invitation to subscribe for or purchase or sell, further shares or debentures to which the prospectus relates, as the case requires.

(2) Subject to subsections (3) and (4), the Registrar shall not make a stop order under subsection (1) unless the Registrar has given a reasonable opportunity to be heard to any affected person as to whether a stop order shall be made.

(3) If the Registrar considers that by giving an opportunity to be heard would cause a delay that will be prejudicial to the public interest, the Registrar may make an interim stop order without giving the opportunity to be heard.

(4) An interim stop order under subsection (3) shall, unless sooner revoked, have effect until the end of twenty-one days from the day on which the interim stop order is made or the conclusion of the hearing in subsection (2), whichever date is the later.

(5) Where a stop order made under subsection (1) or an interim stop order made under subsection (3) is in force, this Part shall apply as if the prospectus has not been registered.

(6) An interim stop order made under subsection (3) may be revoked in writing if the Registrar is satisfied that the circumstances that resulted in the making of the order no longer exists.

(7) Where an application to subscribe for or purchase shares or debentures to which the prospectus relates has been made prior to the stop order made under subsection (1)—

(a) if the shares or debentures have not been issued to the applicant—

(i) the application shall be deemed to have been withdrawn and cancelled and the corporation or such other person who receives the moneys shall forthwith refund all moneys received from the applicant without interest or returns; and

(ii) if the money is not refunded within fourteen days of the stop order, the corporation shall be liable to refund such moneys with interest at the rate of ten per centum per annum or at such other rate as may be specified by the Registrar from the expiration of fourteen days; or

(b) if the shares or debentures have been issued to the applicant, the issue of the shares and debentures shall be deemed to be void and the corporation or such other person shall—

(i) forthwith refund without interest all moneys received from the applicant and if any such moneys is not refunded within fourteen days of the date of service of the stop order, the corporation shall be liable to refund such moneys with interest or returns at the rate of ten per centum per annum or at such other rate as may be specified by the Registrar from the expiration of fourteen days; and

(ii) take necessary steps to effect the stop order.

(8) Any person who contravenes a stop order made under subsection (1) or an interim stop order made under subsection (3) commits an offence and shall, on conviction, be liable to imprisonment for a term not exceeding five years or to a fine not exceeding one million ringgit or to both.