Eighth Schedule

[Section 398]

MORATORIUM FOR CORPORATE VOLUNTARY ARRANGEMENT

Eligibility for moratorium for corporate voluntary arrangement

1. A company is eligible for a moratorium for corporate voluntary arrangement proposed by directors if—

(a) the company is a private company;

(b) the company is not a licensed institution or operator of a designated payment system regulated under the laws enforced by the Central Bank of Malaysia;

(c) the company is not a financial market institution under the Capital Markets and Services Act 2007; or

(d) the company has not created a charge over its property or any of its undertaking.

2. A company is eligible for a moratorium for corporate voluntary arrangement proposed by judicial manager or liquidator if—

(a) the company is being wound up;

(b) the company is under a judicial management order;

(c) the company is not a licensed institution or operator of a designated payment system regulated under the laws enforced by the Central Bank of Malaysia; or

(d) the company is not a financial market institution under the Capital Markets and Services Act 2007.

Duration and extension of moratorium

3. A moratorium shall remain in force for a period of twenty-eight days from the time it commences under paragraphs 1 and 2 but a meeting summoned under paragraph 4 may, subject to consent given by the nominee and members of the company, and obtaining seventy-five per centum majority in value of creditors who are present and voting either in person or by proxy at the meeting, extend this period for not more than sixty days

4. At any meeting where it is proposed to extend the moratorium, before a decision is taken with respect to that proposal, the nominee shall inform the meeting of the actions he has taken in order to comply with his duty under the Seventh Schedule and the costs incurred as a result of his actions for the company, and of any plans he intends to do to continue to comply with that duty if the moratorium is extended and the expected costs of his actions for the company.

5. A moratorium shall end at the end of the day of the meeting summoned under section 399, unless it is extended under paragraph 3.

6. If a moratorium is extended under paragraph 3, it shall end at the end of the day to which it is extended.

7. If no meeting under paragraph 4 is summoned by the nominee within the period of twenty-eight days as required under paragraph 3, the moratorium ends at the last day of that period.

8. A moratorium shall come to an end if a nominee withdraws his consent to act under the Seventh Schedule.

Notification of commencement of moratorium

9. The directors of a company or Official Receiver shall, within seven days after the commencement of a moratorium, notify the nominee of the commencement.

10. After being notified under paragraph 9, the nominee shall, within seven days of the commencement of the moratorium period—

(a) notify the Registrar of the fact of the commencement of the moratorium;

(b) notify the company and any petitioning creditor of the company of whose claim he is aware of the fact of the commencement of the moratorium; and

(c) advertise the fact in the website of the Commission and in one widely circulated newspaper in Malaysia in the national language and one widely circulated newspaper in Malaysia in the English language.

11. For the purposes of this Schedule, “petitioning creditor” means a creditor by whom a winding up petition has been presented before the commencement of moratorium, as long as the petition has not been dismissed or withdrawn.

Notification of end of moratorium

12. A nominee shall, within seven days after a moratorium comes to an end—

(a) advertise the fact in the website of the Commission and in one widely circulated newspaper in Malaysia in the national language or one widely circulated newspaper in Malaysia in the English language; and

(b) notify the Court, the Registrar, the company and any creditor of the company of whose claim he is aware, of the fact of the end of the moratorium.

Moratorium committee

13. A meeting summoned under paragraph 4 to resolve that the period of moratorium be extended may, with the consent of the nominee, establish a moratorium committee to exercise the function conferred on it by the meeting.

14. The meeting under paragraph 13 shall approve an estimate of the expenses to be incurred by the committee in the exercise of the proposed functions.

15. Any expenses not exceeding the amount of the approved estimate under paragraph 14 incurred by the committee in the exercise of its functions shall be reimbursed by the nominee.

16. The committee shall cease to exist when the moratorium comes to an end.

Effects of moratorium

1. During the period for which a moratorium is in force—

(a) no petition may be presented for the winding up of the company;

(b) no meeting of the company may be called or requisitioned except with the consent of the nominee or the leave of the Court and subject to, where the Court gives leave, such terms as the court may impose;

(c) no resolution may be passed or order may be made for the winding up of the company;

(d) no application for judicial management order may be made against the company;

(e) no judicial manager of the company may be appointed under Subdivision 2 of Division 8 of Part III;

(f) no landlord or other person to whom rent is payable may exercise any right of forfeiture by peaceable re-entry in relation to premises let to the company in respect of a failure by the company to comply with any term or condition of its tenancy of such premises, except with the leave of the Court and subject to such terms as the Court may impose;

(g) no other steps may be taken to impose any security over the company’s property, or to repossess goods in the company’s possession under any hire-purchase agreement, except with the leave of the Court and subject to such terms as the Court may impose;

(h) no other proceedings and no execution or other legal process may be commenced or continued, and no distress may be levied, against the company or its property except with the leave of the Court and subject to such terms as the Court may impose; and

(i) no steps shall be taken to transfer any share of the company or to alter the status of any member of the company except with the leave of the Court and, where the Court gives leave, subject to such terms as the Court may impose.

Company invoices, orders for goods, etc.

18. At a time when a moratorium is in force in relation to a company, the nominee’s name and a statement that a moratorium is in force for the company shall appear on—

(a) its business letters, notices and other official publications, including in electronic mediums;

(b) its websites;

(c) its bills of exchange, promissory notes, endorsements and order forms;

(d) cheques purporting to be signed by or on behalf of the company;

(e) orders invoices and other demands for payment, receipts and letter of credit purporting to be issued or signed by or on behalf of the company; and

(f) all other forms of its business correspondence and documentation.