The Companies Commission of Malaysia (CCM) has issued its Public Consultation document enclosing the present draft of the Companies Bill 2013. The Bill, if passed in its present form, will greatly expand the present Companies Act 1965 where the Bill contains more than 631 sections compared with the 374 of the present Act.
For those who read the Bill, it is advisable to also read it together with the Final Report of the Corporate Law Reform Committee of the CCM issued back in 2008. This report formed the basis and contained the recommendations which were largely adopted within the Bill.
It will take a while for all the practitioners to digest all of these new provisions. My quick observation, from an insolvency practitioner point of view, is that the new Bill contains welcomed-additions to attempt to clarify the law of receivership while introducing more flexible corporate rescue mechanisms such as judicial management and the corporate voluntary arrangement.
I hope to share some of my thoughts on the Bill once I have had a bit more time to read through it all.
The quality of drafting leaves a lot to be desired. Some of my comments: http://weng.com.my/Archives/Details.aspx?id=9
Thanks Weng! Good comments you have made, especially with the attempt at reversing the effect of Jet-Tech.
I would just add that in relation to the statutory derivative action provisions, firstly, I am not sure if it is a typo or not but s.347(3) of the Bill has now abrogated the common law right to bring a derivative action (unlike the present express preservation of that common law right under s.181A(3)). The common law right should still be maintained, to allow for the potential need to apply for urgent interim relief or even for the possibility of a multiple derivative action. The preservation of the common law right, I believe, is also in line with the CLRC recommendations.
Secondly, in expanding on your recommendation of having to defend, bring or intervene in a Court action, I think there was some discussion in Singapore on whether this right in relation to “proceedings in Court” should extend to arbitration proceedings as well.