Section 596. Restriction on offering shares, debentures, etc., for subscription or purchase

(1) A person shall not, whether by appointment or otherwise, go from place to place—

(a) offering shares for subscription or purchase to the public or any member of the public; or

(b) seeking or receiving offers to subscribe for or to purchase shares from the public or from any member of the public.

(2) Subsection (1) shall not apply—

(a) to an offer for subscription or purchase or invitation to subscribe for or purchase or recommendation to which the Capital Markets and Services Act 2007 applies; and

(b) in the case of shares of any corporation—

(i) notice of intention to apply for exemption from subsection (1) in the form and manner as determined by the Registrar has been advertised in one widely circulated newspaper in Malaysia in the national language and one widely circulated newspaper in Malaysia in the English language; and

(ii) the exemption from the application of subsection (1) has been obtained from the Minister upon the recommendation of the Registrar.

(3) For the purposes of subsection (1), a person shall not in relation to a corporation be regarded as not being a member of the public by reasons only that he is a shareholder in the corporation or a purchaser of goods from the corporation.

(4) A person shall not make any oral invitation or offer to the public or to any member of the public to subscribe for or to purchase shares.

(5) A person shall not make an offer to purchase any shares to the public or to any member of the public who is not a person whose ordinary business is to buy or sell shares, whether as principal or agent.

(6) Subsection (5) shall not apply—

(a) where the shares to which the offer relates are shares of a class which are quoted on, or in respect of which permission to deal has been granted by a stock exchange and the offer states and specifies the stock exchange;

(b) where the shares to which the offer relates are shares which a corporation has allotted or agreed to allot with a view to shares being offered for sale to the public and the offer is accompanied with a document that complies with this Act and any other written law relating to prospectus;

(c) to any application for shares in or debentures of a corporation or to any invitation to deposit money with or lend money to a corporation which is issued, circulated, distributed or made subject to and in accordance with Subdivision 9 of Division 1 of Part III or in accordance with the provisions of Division 3 of Part VI of the Capital Market and Services Act 2007;

(d) where the offer relates to an interest to which the Interest Schemes Act 2016 applies and is accompanied with a statement in writing as required by that Act;

(e) to deposits or loans to a corporation referred to in section 158; or

(f) to any advice as to the price at which a management company is prepared to buy or sell any interest to which the Interest Schemes Act 2016 applies, given or sent by the management company to any person to whom the management company has given or sent a statement in writing relating to that interest which complies with the Interest Schemes Act 2016 within the period of six months immediately preceding the giving or sending of the advice.

(7) Every person who acts, or incites, causes or procures any person to act, in contravention of 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.

(8) Where a person convicted of an offence under this section is a corporation, every officer concerned in the management of the corporation shall be guilty of a similar offence unless he proves that the act constituting the offence took place without his knowledge or consent.

(9) Where any person is convicted of having made an offer in contravention of this section, the Court before which he is convicted may order that any contract made as a result of the offer shall be void and may give such consequential directions as the Court thinks proper for the repayment of any money or the retransfer of any shares.

(10) In this section, “shares” means shares of a corporation whether a corporation in existence or to be formed and includes debentures and units and without affecting the generality of the expression “debentures”, all such documents, including those referred to as “bonds”, as confer or purport to confer on the holder any claim against a corporation, whether the claim is present or future or certain or contingent or ascertained or sounding only in damages and also includes any interest as referred to in the Interest Schemes Act 2016.

(11) In this section, a reference to an offer or offering of shares for subscription or purchase or for purchase shall be construed as including an offer of shares by way of barter or exchange and a reference to an offer of shares shall subject to subsection (12), be construed as including an offer by means of broadcasting, television or cinematograph.

(12) If an offer is made by means of broadcasting, television or cinematograph, the prospectus by which the offer is required to be accompanied under this section shall be deemed to accompany the offer if—

(a) the prospectus is prepared by the person on whose behalf the offer is made;

(b) the public are informed at the same time and by the same means as that by which the offer is made that a copy of the prospectus will be supplied on request being made at a specified address;

(c) if request for a copy of a prospectus is made at that address within thirty days from the offer was made, the person making the request is supplied with a copy within seven days from the request was made; and

(d) the offer contains no more information or matter than the information or matter referred to in paragraph 163(1)(a).