MALAYSIA Law and Practice Contributed by: Dato’ Tan Yee Boon, Stephanie Chan Pik Jia and Joaana Keng Li Xin, David Lai & Tan
care and in the best interests of the company. Additionally, CA 2016 empowers the court to grant relief from liability where it is satisfied that the director has acted honestly and reasonably. 4.10 Approvals and Restrictions Concerning Payments to Directors/ Officers In Malaysia, remuneration, fees and benefits pay - able to directors and officers of a company, as well as loans to directors, are subject to approval requirements and restrictions that are primarily governed by CA 2016 and regulations issued by regulatory bodies such as Bursa Malaysia. Pursuant to Section 224 of CA 2016, a company shall not make a loan to a director of the compa - ny or of a company deemed to be related to that company, nor shall it enter into any guarantee or provide any security in connection with a loan made to such a director by any other person. By virtue of Section 225 of CA 2016, subject to certain provisions, a company (other than an exempt private company) shall not make a loan to any person connected with a director of the company or its holding company, nor enter into any guarantee or provide any security in con - nection with a loan made to such person by any other person. Nevertheless, this shall not apply to, amongst others, loans made to a person con - nected with a director who is engaged in the full-time employment of a company or its related corporation, as the case may be, (i) for the pur - pose of meeting the expenditure incurred or to be incurred by him or her in purchasing or other - wise acquiring a home or (ii) in accordance with a scheme for the making of loans to employees approved by the company. Pursuant to Section 226 of CA 2016, a company shall not pay a director any remuneration free
of income tax, or otherwise calculated by refer - ence to or varying with the amount of his or her income tax or the rate of income tax. Furthermore, Section 230 of CA 2016 provides that the fees of the directors, and any benefits payable to the directors (including any com - pensation for loss of employment of a direc - tor or former director of a public company, or of a public listed company and its subsidiaries) shall be approved at a general meeting. As for a private company, the Board may, subject to the company’s Constitution, approve the fees of the directors and any benefits payable to the directors, including any compensation for loss of employment of a director or former direc - tor. Contravention of the same constitutes an offence for which, upon conviction, the company and/or its officers will be liable to imprisonment, a fine or both, where the figures relies on the specific contravention. 4.11 Disclosure of Payments to Directors/Officers In Malaysia, companies must publicly disclose details about the remuneration, fees and benefits provided to directors and officers. The purpose of such disclosure is to promote transparency for shareholders and stakeholders, ensuring accountability in corporate governance. CA 2016, the Listing Requirements and the MCCG outline such obligations. Pursuant to Section 219 (1) of CA 2016, a direc - tor shall give notice in writing to the company of, inter alia, the following: • particulars relating to the shares, debentures, participatory interests, rights, options and contracts as necessary; • the particulars of any change in respect of the particulars aforesaid of which notice has been
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