Adilah Abd Razak

Discharge in bankruptcy: a comparative analysis of law and practice between Malaysia, Singapore and the United Kingdom (UK) – What can we learn?

In common law jurisdictions such as Malaysia, United Kingdom and Singapore, bankruptcy law is the legal mechanism in situations where individuals fall into bankruptcy. In the UK, automatic discharge was introduced fifteen years ago. Yet, no equivalent concept of automatic discharge has been introduced in Singapore, while in Malaysia, although a new provision allowing for an automatic discharge of bankrupt was proposed in the new Bankruptcy (Amendment) Bill 2016, it has yet to come into force upon official announcement by the Malaysian authorities. This paper examines and compares the laws and practices of discharge of bankrupts in Malaysia, the UK and Singapore.

Schemes of arrangement as corporate rescue mechanisms: the Malaysia experience

The objective of the schemes of arrangement (SOA) is to arrive at a binding compromise or arrangement if it is approved by the Court on all the creditors or class of creditors or on the members or class of members and also on the company or, in the case of a company in the course of being wound up, on the liquidator and contributories of the company. There are a variety of modes and forms of compromises or arrangement or both under SOA, which can be used to rescue a company or its business, which is facing financial difficulties. Furthermore, the SOA enable a company to make an application to the court for a restraining order that provides a sort of moratorium from creditors’ action, giving the ailing companies time and space to negotiate the proposed Scheme that can be tailored to their needs to be rescued. This paper examines the process and effects of SOA. It also evaluates the use of the SOA in Malaysia as corporate rescue mechanisms.

Paradigm shift or mere codification of law: a review of directors’ duties in Malaysia

Directors’ duties to manage their company’s affairs originate from many sources. In Malaysia the sources of directors’ duties to the company are the common law, equity and statutory provisions. Directors’ duties can also exist from a company’s constitution and such duties can be contractual (contained in the letter of appointment). Under common law, directors have a duty of care and skill, while directors’ fiduciary duties of loyalty and good faith evolved under equity. These duties operate in parallel with the statutory duties imposed by the Malaysian Companies Act (CA) 1965. After the first major attempt at updating the CA 1965 via the Companies (Amendment) Act 2007, several changes were made to the law relating to common law, equitable and statutory duties of directors. This article examines the changes to the CA 1965 concerning duty of care and skill and fiduciary duties of directors of Malaysian companies. It also analyses the business judgment rule.