Vol 14 (2017) - Issue 6

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The Arrival of Corporate Rescue in Malaysia: New Frameworks and Challenges

Introduction
In the Victorian age, one of the by-products of the mania for codification, particularly in the commercial law, was the extension of legislation to the Imperial possessions, whether expressly or as 'statutes of general application'. Unsurprisingly, given that company and insolvency law is commercial law par excellence, statutory developments in the United Kingdom and elsewhere in the common law world have influenced like developments in Malaysia. Thus, the first company law statute to be applied in the Straits Settlements was the Indian Companies Ordinance 1866, which was replaced by a local ordinance in 1889, the framework being renewed by successor legislation in 1915, 1923 and 1940. The Federated Malay States applied a Companies Enactment 1897, replaced in 1917. Similar laws were made applicable in each of the Unfederated Malay States as local enactments. The content and style of the various ordinances and local enactments generally reflected the model of English company law statutes prevailing at the time. The formation of the Malayan Union in 1948 by the amalgamation of the various Malay States together with the Straits Settlements, saw the extension of the Straits Settlements regime to the Malay States. This state of affairs was maintained after the independence of the Malayan Federation in 1957 and the formation of Malaysia in 1963.
At the formation of Malaysia, the Malayan Federation and Singapore thus had the same company law. However, the addition of two new statutes in the shape of the Sabah and Sarawak equivalents, the Companies Ordinances 1950 and 1956 respectively, prompted the Government to form a committee to consider the introduction of a single unified Act. The influences behind what became the Companies Act 1965 were the United Kingdom Companies Act 1948, the Australian Uniform Companies Act 1961 and the Ghanaian Companies Code drafted by Professor Gower in 1963. Although Singapore had left the Federation by the time the Act came into force, the Singapore Companies Act 1967 was identical in most respects to the Malaysian legislation.