Section 222. Interested director not to participate or vote

(1) Subject to section 221, a director of a company who is in any way, whether directly or indirectly, interested in a contract entered into or proposed to be entered into by the company, unless the interest is one that need not be disclosed under section 221, shall be counted only to make the quorum at the meeting of the Board but shall not participate in any discussion while the contract or proposed contract is being considered during the meeting and shall not vote on the contract or proposed contract.

(2) Subsection (1) shall not apply to—

(a) a private company unless it is a subsidiary to a public company;

(b) a private company which is a wholly-owned subsidiary of a public company, in respect of any contract or proposed contract to be entered into by the private company with the holding company or with another wholly-owned subsidiary of that same holding company;

(c) any contract or proposed contract of indemnity against any loss which any director may suffer by reason of becoming or being a surety for a company; and

(d) any contract or proposed contract entered into or to be entered into by a public company or a private company which is a subsidiary of a public company, with another company in which the interest of the director consists solely of—

(i) in him being a director of the company and the shareholder not more than the number or value as is required to qualify him for the appointment as a director; or

(ii) in him having an interest in not more than five per centum of its paid up capital.

(3) A contract entered in contravention of subsection (1) shall be voidable at the instance of the company except if it is in favour of any person dealing with the company for a valuable consideration and without any actual notice of the contravention.

(4) A director who contravenes this section commits 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.