Section 590. Investigation of affairs of company at direction of Minister

(1) The Minister may, either of his own motion or on the application of—

(a) in the case of a company having a share capital—

(i) not less than two hundred members or members holding at least ten per centum of the issued shares; or

(ii) debenture holders holding not less than twenty per centum of the value of the issued debentures; or

(b) in the case of a company not having a share capital, not less than twenty per centum of the total members,

declare the affairs of the company or foreign company to be investigated under this section.

(2) The Minister may make the declaration on his own motion under subsection (1) if he is satisfied that—

(a) a prima facie evidence has been established that for the protection of the public, the interest holders of a scheme under the Interest Schemes Act 2016, the members or creditors of a company or a foreign company, an investigation to be carried out under this section;

(b) it is in the public interest that allegations of fraud, misfeasance or other misconduct by persons who are or have been concerned with the formation or management of a company or a foreign company be investigated under this section;

(c) for any other reason it is in the public interest that the affairs of the company or foreign company be investigated under this section; or

(d) in the case of a foreign company, the appropriate authority of another country has requested that a declaration be made under this section.

(3) An application under this section shall be supported by evidence as the Minister requires and the reasons of the applicants in requiring the investigation.

(4) Before declaring that an investigation to be carried out under this section, the Minister may require the applicants to give security to such amount as he thinks fit for the costs of the investigation.

(5) On or after the commencement of an investigation under this section until the expiration of three months after a final report is presented to the Minister as to the findings of the investigation, no proceedings or actions shall be commenced or proceeded in any Court without the consent of the Minister—

(a) by the company in respect to or in respect of any contract, bill of exchange or promissory note; or

(b) by the holder or any other person in respect of any bill of exchange or promissory note made, drawn or accepted by or issued, transferred, negotiated or endorsed by or to the company unless at the time of the negotiation, transfer, issue, endorsement or delivery, the holder or other person—

(i) has given adequate pecuniary consideration; and

(ii) at any time within three years before, was not a member, officer, agent or employee of the company or the wife or husband of a member, officer, agent or employee of the company.

(6) For the purposes of this section—

“affairs of the company” includes—

(a) the promotion, formation, membership, control, trading, dealings, business and property of the company;

(b) the ownership of shares in, debentures of or participatory interests issued by the company;

(c) the ascertainment of the persons who are or have been financially interested in the success or failure or apparent success or failure of the company or are or have been able to control or materially to influence the policy of the company; and

(d) the circumstances under which a person acquired or disposed of or becomes entitled to acquire or dispose of shares in, debentures of or participatory interests issued by the company;

“officer or agent”, in relation to a corporation, includes—

(a) a director, banker, advocate or auditor of the corporation;

(b) a person who at any time—

(i) has been a person referred to in paragraph (a); or

(ii) has been otherwise employed or appointed by the corporation;

(c) a person who—

(i) has in his possession any property of the corporation;

(ii) is indebted to the corporation; or

(iii) is capable of giving information concerning the promotion, formation, trading, dealings, affairs or property of the corporation; and

(d) where there are reasonable grounds for suspecting or believing that a person is a person referred to in paragraph (c), that person.

(7) Any person who with intent to defeat the purposes of this section, or to delay or obstruct the carrying out of an investigation under this section—

(a) destroys or alters any book, document or record of or relating to a company or foreign company declared under this section; or

(b) sends or attempts to send or conspires with any other person to send out of Malaysia any such book, document or record or any property of any description belonging to or in the disposition or under the control of the company or foreign company,

commits an offence and shall, on conviction, be liable to a term of imprisonment not exceeding five years or to a fine not exceeding one million ringgit or to both.