Kootu Funds (Prohibition) Act 1971

Original Language Title: Kootu Funds (Prohibition) Act 1971

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028b.fm law REPRINT MALAYSIA PUBLISHED by the COMMISSIONER of law revision, UNDER the AUTHORITY of law REVISION ACT 1968 in COLLABORATION with MALAYAN LAW JOURNAL SDN BHD and PERCETAKAN NASIONAL MALAYSIA BHD 2006 Act 28 (Prohibition) Act 1971 KOOTU FUNDS Contain all amendments to 1 January 2006 028b.fm Page 1 Monday, March 27, 2006 5:26 PM PREPARED for PUBLICATION by the MALAYAN LAW JOURNAL SDN BHD and PRINTED by PERCETAKAN NASIONAL MALAYSIA BERHAD KUALA LUMPUR BRANCH 2006 2 (Prohibition) Act KOOTU FUNDS 1971 Royal Assent Date............ 27 April 1971, the date of publication in the Gazette......... 29 April 1971 REPRINT BEFORE Reprinting The first ... ... more 1993 the second Reprint of ... ... more 1999 028b.fm Page 2 Monday, March 27, 2006 5:26 PM 3 laws of MALAYSIA Act 28 (Prohibition) Act FUND LICE 1971 ARRANGEMENT of SECTIONS section 1. Short title 2. Interpretation 3. Wrong in legally doing business organizing money ticks 4. Registration for enterprise to organise money lice banned in Peninsular Malaysia 5. Licensing a business organizing money lice prohibited in Sabah 6. Licensing a business organizing money lice prohibited in Sarawak 7. Registration of a company which organizes money lice prohibited 8. Registered company which organizes money fleas must stop doing business 9. Winding on request the Minister 10. Criminal liability 11. Rules 12. Act 13. Abolition of 028b.fm Page 3 Monday, March 27, 2006 5:26 PM 028b.fm Page 4 Monday, March 27, 2006 5:26 PM 5 laws of MALAYSIA Act 28 (Prohibition) Act 1971 KOOTU FUNDS an act to prohibit the registration or licensing business which organizes or intended to organize money ticks and registration company that its purpose or one of the aim is to organise a plan or arrangement that is known by various names such as fleas , cheetu, chit fund, hwei, tontine or others and also to make as one in law for anyone running a business organizing plans or the arrangement and to provide for matters incidental thereto.
[Throughout Malaysia — 30 April 1971]
BE IT enacted by the Seri Paduka Baginda Yang di-Pertuan Agong with the advice and consent of the Dewan Negara and Dewan Rakyat in Parliament assembled, and by the authority of the same, as follows: short title 1. This Act may be cited as (Prohibition) Act 1971 Kootu funds.
Interpretation 2. (1) in this Act, unless the context otherwise requires-"the company" means a company as defined in the companies Act 1965 [Act 125], and includes the Corporation as defined in the Act;
"kootu funds" means a plan or arrangement that is known by various names such as fleas, cheetu, chit fund, hwei, tontine or the like which of the members 028b.fm Page 5 Monday, March 27, 2006 5:26 PM 6 laws of Malaysia Act 28 pay regular fees or otherwise to a fund jointly and joint fund is sold or paid to you by auction , a tender, offer, vote or otherwise and includes any plan or arrangement of various types such as ticks, cheetu, chit fund, hwei or tontine;
"Minister" except in sections 4, 5 and 6, means the Minister for the time being responsible for the domestic trade and Consumer Affairs;
"organized" including manage, organise, carry or otherwise organize, and also includes help, help or take any part in organizing it.
(2) (Not applicable in the bahasa Malaysia translation).
(3) any reference in this Act on the winding up of a company include, if the company is a foreign company, a reference to the winding up of the Affairs of a foreign company so far with respect to the assets of the foreign company in Malaysia.
Wrong in legally doing business organizing money ticks 3. Wrong side of the law for anyone running a business organizing money lice and a person who carries on the business commits an offence and, on conviction, be liable to a fine not exceeding five thousand ringgit or to imprisonment for a term not exceeding three years or to both.
Registration for enterprise to organise money lice banned in Peninsular Malaysia 4. (1) any business which organizes or intended to organize money lice can not be registered under the registration of businesses Act 1956 [Act 197] Peninsular Malaysia (hereinafter referred to in this section as "the Act").
(2) No person shall obtain a registration under the Act of organizing a business or intended to organize money ticks.
028b.fm Page 6 Monday, March 27, 2006 5:26 PM (Prohibition) Kootu funds 7 (3) No person who carries on a business that is registered under the Act may conduct business organizing money ticks.
(4) a business partner who, on the date this Act comes into operation, been duly registered under the Act and organizing or intended to organize money lice shall immediately stop doing business and shall immediately notify the Registrar of that business iagaan i tu mengan jurkan or d imaksudkan un tuk organizing money lice and when notified of such Registrar shall immediately cancel the certificate of registration.
(5) the Registrar shall immediately cancel the certificate of registration of a business if he is satisfied with the details of the business submitted under subsection 5 (1) of the Act that the business organised or intended to organize money ticks, and shall notify in writing a responsible ("responsible person" as defined in the Act) that the certificate has been revoked and also why.
(6) a business partner who is not satisfied with a decision made by the Registrar under subsection (5) may, within thirty days from the date of the decision served under subsection (5) to the person responsible for the appeal to the Minister against such decision and the final decision of the Minister; While waiting for the results of the appeal, the appeal does not operate as postpone the cancellation of the certificate of registration unless the Minister otherwise directs.
(7) any person who contravenes subsection (2) or (3) and a partner enterprise that fails to comply with subsection (4) commits an offence and apabi la conviction, be liable to a fine not exceeding five thousand ringgit or to imprisonment for a term not exceeding three years or to both.
(8) there is nothing in this section shall affect or be deemed to affect a civil claim that might be on the part of any person, including a participant in a kootu funds, against someone friend s e s u a t u r e r n i a g a a n y a n g t e l a h d i b a t a l k a n p e r a k u n s registration under provisions of this section or the 028b.fm Page 7 Monday, March 27, 2006 5:26 PM 8 laws of Malaysia Act 28 stops doing business by reason of the provisions of this section.
(9) No person shall be entitled to any payment returned to him by reason of the revocation of a certificate of registration of a business under this section.
(10) for the purposes of this section — (a) a Registrar or inspector may exercise all the powers conferred on them respectively under the Act in a way that fully and adequately as if this section becomes part of the Act; and (b) of section 2 of the Act shall apply as if this section becomes part of the Act.
Licensing a business organizing money lice prohibited in Sabah 5. (1) any business which organizes or intended to organize money lice can not be granted a licence under the Sabah Trade Licensing Ordinance [Cap. 144] (hereinafter referred to in this section as "the Ordinance").
(2) No person shall trade licences under the Ordinance for enterprise to organise or intended to organize money ticks.
(3) No person shall conduct business granted a licence under the Ordinance can carry out business organizing money ticks.
(4) a proprietor or partner Enterprise te lah was given licence under the Ordinance i tu and organizing or intended to organize money ticks, on the date this Act comes into force, shall immediately stop doing business and shall immediately inform the licensing authority that business iagaan i tu mengan jurkan or d imaksudkan un tuk organizing money lice and when notified of such licensing authorities i tu shall forthwith cancel the trade licence for that business.
028b.fm Page 8 Monday, March 27, 2006 5:26 PM (Prohibition) Kootu funds 9 (5) the licensing authority shall immediately cancel the trade licence enterprise if it is satisfied with business details submitted to the licensing authority under the Ordinance that business iagaan i tu mengan jurkan or d imaksudkan un tuk organizing money ticks, and shall notify in writing the proprietor or partner of the business that the trade licence has been revoked and also why.

(6) a proprietor or partner of a business who is not satisfied with a decision made by the licensing authority under subsection (5) may, within thirty days from the date of the decision served under subsection (5), appeal to the Minister against such decision and the final decision of the Minister; While waiting for the results of the appeal, the appeal does not operate as postpone cancellation of license trade for that business unless the Minister otherwise directs.
(7) any person who contravenes subsection (2) or (3) and the proprietor or partner of a business that fails to comply with subsection (4) commits an offence and, on conviction, be liable to a fine not exceeding five thousand ringgit or to imprisonment for a term not exceeding three years or to both.
(8) there is nothing in this section shall affect or be deemed to affect a civil claim that might be on the part of any person, including a participant in a kootu funds, against the proprietor or partner of a business that its trading licence has been cancelled under the provisions of this section or stop doing business by virtue of this section.
(9) No person shall be entitled to any payment returned to him by reason of the cancellation of a trade licence under this section.
(10) for the purposes of this section — (a) a licensing authority may exercise all the powers conferred to him under the Ordinance in a way that fully and adequately as if this section becomes part of the Ordinance; and 028b.fm Page 9 Monday, March 27, 2006 5:26 PM 10 laws of Malaysia Act 28 (b) of section 2 of the Ordinance shall apply as if this section becomes part of the Ordinance.
(11) "Minister" means the Minister in this section mentioned in the Ordinance.
Licensing a business organizing money lice prohibited in Sarawak 6. (1) any business which organizes or intended to organize money lice can not be granted a licence under the Ordinance Licensing business, profession and trade Sarawak [Chapter 33] (hereinafter referred to in this section as "the Ordinance").
(2) No person shall trade licences under the Ordinance for enterprise to organise or intended to organize money ticks.
(3) No person shall conduct business granted a licence under the Ordinance can carry out business organizing money ticks.
(4) a proprietor of a business that has been granted a licence under the Ordinance and organizing or intended to organize money ticks, on the date this Act comes into force, shall immediately stop doing business and shall immediately notify the Collector that the business organised or intended to organize money lice and when told such a Collector shall immediately cancel the trade licence for the business.
(5) the Collector shall immediately cancel the trade licence if the enterprise he is satisfied with the details of the business submitted to him under the Ordinance i business i tu tu that organize or intended to organize money ticks, and shall notify in writing the business proprietor that the trade licence has been revoked and also why.
(6) an owner of a business who is not satisfied with a decision made by the Collector under subsection (5) may, within thirty days from the date of the decision served under subsection 028b.fm Page 10 Monday, March 27, 2006 5:26 PM (Prohibition) Kootu funds 11 (5), appeal to the Minister against such decision and the final decision of the Minister; While waiting for the results of the appeal, the appeal i tu t not operate as postpone cancellation of license commercial business unless the Minister otherwise directs.
(7) any person who contravenes subsection (2) or (3) and proprietor of a business that fails to comply with subsection (4) commits an offence and, on conviction, be liable to a fine not exceeding five thousand ringgit or to imprisonment for a term not exceeding three years or to both.
(8) there is nothing in this section shall affect or be deemed to affect a civil claim that might be on the part of any person, including a participant in a given Fund ticks, proprietor of sesua tu te lah iagaan, d a d iba ta lkan its trading licence under this section or who stop doing business by virtue of this section.
(9) No person shall be entitled to any tax refunded to him by reason of the cancellation of a trade licence under this section.
(10) for the purposes of this section — (a) a Collector may exercise all the powers conferred upon him under the Ordinance in a way that fully and adequately-this section includes just by being part of the Ordinance; and (b) of section 2 of the Ordinance shall apply as if this section becomes part of the Ordinance.
(11) "Minister" means the Minister in this section mentioned in the Ordinance.
Registration of a company which organizes money lice prohibited 7. A company that its purpose or one of the aim is to organise money lice can not be registered under the companies Act 1965.
028b.fm Page 11 Monday, March 27, 2006 5:26 PM 12 laws of Malaysia Act 28 registered company which organizes money fleas must stop doing business 8. (1) when this Act comes into operation a company registered its purpose or one of the aim is to organise money ticks (hereinafter referred to in this section and section 9 as "the company") must immediately stop doing business organizing money ticks.
(2) every company shall be either — (a) within ninety days from the date of February 18, 1971, take the necessary measures under the companies Act 1965 to change the memorandum of Association and (if any) order his association that does not contain provisions which allow it to conduct business to organize money lice; or (b) within ninety days from the date of February 18, 1971 or within one month after the expiry of all periods may have been given under subsection (3), whichever is longer, either — (i) set with special stipulations that it wound up on a voluntary basis under paragraph 254 (1) (b) of the companies Act, 1965; or (ii) set with special stipulations that it d i g u l u n g o l e h M a h k a m a h d a n d I n g a n appropriate submit an application to the Court under paragraph 217 (1) (a) of the companies Act 1965 to an order that it wound up.
(3) Notwithstanding subsection (1) and notwithstanding anything that has been made under paragraph (2) (a) the company may, within ninety days from the date of February 18, 1971, apply to the Registrar to continue to undertake ongoing kutunya money on the date this Act comes into operation to respectively anti-dust money has been completed , and the Registrar may give or not give such permission; j if the Registrar gives such permission he shall fix a period of 028b.fm Page 12 Monday, March 27, 2006 5:26 PM (Prohibition) Kootu funds 13 allowed that but such period shall not be more than twelve months; and the Registrar shall, on application made o consequences of syar if t i tu, and in its b icara mut laknya, provide, from time to time, extension but extension granted everything can not be more than twelve months.
(4) for the purposes of subsection (3) the Registrar may, from time to time, give any direction to the company and make such investigation as he considers expedient or necessary.
(5) where permission is granted under subsection (3) the Registrar may, from time to time, impose such terms and conditions as it considers expedient or necessary.
(6) the Registrar may, at any time, withdraw or modify any permission given under subsection (3) or any term or condition imposed under subsection (5).
(7) if the company is not satisfied with — (a) a decision made under subsection (3) or (6); or (b) any direction given by the Registrar under subsection (4); or (c) any term or condition imposed by the Registrar under subsection (5), the company may, within thirty days from the date of any decision, direction, term or condition that is delivered to the company, appeal to the Minister against such decision and the decision of the Minister is final.
(8) If subsection (1) is not complied with, the company and every officer of the company which fails to comply with it commits an offence and, on conviction, be liable to a fine not exceeding five thousand dollars or to imprisonment not exceeding three years or to both: provided that the company shall not be liable upon the offence in respect of the Group's funds on the 028b.fm Page 13 Monday, March 27, 2006 5:26 PM 14 laws of Malaysia Act 28 the date this Act comes into effect from the time of an application by the company under subsection (3) is received by the Registrar and the outcome has been made thereon by the Registrar and then for a period of a permission given by the Registrar under subsection (3) force:

And further provided that such permission shall be deemed inoperative if the company violates any term or condition imposed by the Registrar under subsection (5).
(9) "Registrar" in this section means the Registrar of companies and does not include a person Registrar Region, Deputy Registrar or Assistant Registrar of companies.
Winding on request the Minister 9. (1) if the company does not take action under subsection 8 (2), or if, after taking the action, it doesn't get the desired changes are made to the memorandum of Association and (if any) order his association or doesn't resolve the winding freely joined or not get a court order so it wound up, as the case may be, within a reasonable time, the Minister — (a) may cause to an investigation about the Affairs of the company is made in such manner as it thinks fit; and (b) shall submit an application to the Court — (i) for the roll of the company; or (ii) if the company is a foreign company, to wind up the Affairs of the company so far as be rkenaan with a se tnya da lam of Malaysia, under section 205 of the companies Act 1965, and the company shall, for the purposes of section, deemed to be a company that declared and has been reported by an examiner, as referred to in section 205, and the application shall be dealt with by 028b.fm Page 14 Monday , March 27, 2006 5:26 PM (Prohibition) Kootu funds 15 Court under the companies Act 1965, with any necessary adaptations as an application of the Minister under section 205 of the respect of the company referred to in section 205 as a company declared and has been reported by an examiner.
(2) for the purposes of a proceeding under the companies Act 1965, to wind up the company, rules relating to the winding-up shall apply with any modifications that are deemed by the Court in its discretion as fit and either expedient or necessary: provided that where the Minister to submit to the Committee the proposed Method to make special provisions under section 372 of the companies Act 1965 , in relation to the company, the Committee may, by rules under section i tu, tkuasakan proposed i tu mengua either as submitted or subject to any modifications which the Committee may think fit.
(3) proposed under the proviso to subsection (2), and rules made pursuant to the proviso, could provide for modify or mengecual fish, in relation to the company, the provisions of part X of the companies Act 1965, which requires meeting or otherwise held in connection with the winding-up procedure.
(4) the expenses of winding up as a result of an application made under subsection (1) (including remuneration for debt Solver piutang) shall, to the extent that cannot be paid out of the assets of the company will be completed by the Minister; and the Minister may make advance pay the expenses, or provide a contribution towards the expenses so that the company's assets (the amount of) regardless of the pay.
(5) the Fund specified in the second schedule of the financial Procedure Act 1957 [Act 61], shall (notwithstanding subsection 10 (4) of the Act) included a fund named Fund Debt Solutions Company Piutang Kootu funds to pay expenses of the Minister under this section; and subsection 10 (3) shall apply to the money received by the Minister as repayment of the advance 028b.fm Page 15 Monday, March 27, 2006 5:26 PM 16 laws of Malaysia Act 28 granted by it under this section, as that section applies for money referred to in subsection 10 (3) of that.
Criminal liability 10. (1) if the person who commits an offence under this Act is a company, every person who at the time of the offence committed is an independent, General Manager, Manager, Secretary or other officer of the company relating to the management of the company in the Federation or purporting to be worked in any of the posts and also the company shall be deemed to have committed the offence and can take action against him and sentenced accordingly : provided that it shall be a defence for that person if he proves that the offence was committed with no consent or by not left by him and that he has been as supposed to prevent the offence in view of the types of duties and to all the circumstances of the other.
(2) for the purposes of this section "company" includes — (i) a body corporate;
(ii) a firm or other Association of individuals;
(iii) an ordinary and individuals registered or are granted a license under any law in force in Malaysia relating to registration or licensing business.
(3) if the agent or servant of a person (i.e. the person hereinafter referred to in this section as the "principal") doing or not doing something (which if done or omitted by the principal will be an offence under this Act), the principal shall, even if he doesn't know anything at all about the offence, be deemed to be guilty of that offence and he is punishable for the offence : provided that it shall be a defence for the principal if he proves — 028b.fm Page 16 Monday, March 27, 2006 5:26 PM (Prohibition) Kootu funds 17 (a) that the act done or omitted as complained of are not included in the field of employment of the servants or agents; and (b) that the principal is not in any way or subsequently confirmed acts done or not done that.
(4) where the agent or the principal officials should do or not do something (which if done or omitted by the principal will be an offence under this Act), agent or servants therefore also committed such offence.
(5) this section is in addition to and not in derogation of any other provisions of this Act.
Rules 11. The Minister may make rules to carry out the objects and purposes of this Act.
Act 12. Provisions of this Act without prejudice to the provisions of the registration of businesses Act 1956, Peninsular Malaysia or Sabah Trade Licensing Ordinance or Ordinances Licensing business, profession and trade Sarawak or the companies Act 1965 but if there is any conflict between Ordinance or the companies act by this Act, the provisions of this Act shall apply.
The abolition of 13. Ordinance No. 84 (powers necessary) Emergency 1971 [P.U. (A) 69/1971] is hereby repealed.
028b.fm Page 17 Monday, March 27, 2006 5:26 PM 18 laws of MALAYSIA Act 28 (Prohibition) Act KOOTU FUNDS 1971 LIST AMENDMENT of laws that amend the short title of the Act in force Act 160 Malaysian currency (Ringgit) 1975 29-08-1975 028b.fm Page 18 Monday, March 27, 2006 5:26 PM 19 laws of MALAYSIA Act 28 (Prohibition) Act KOOTU FUNDS 1971 LIST of SECTION AMENDED Section Power amend with effect from 3rd Act 160 29-08-4 1975 Act 160 29-08-1975 5 Act 160 29-08-1975 6 Act 160 29-08-1975 8 Act 160 29-08-1975 028b.fm Page 19 Monday, March 27, 2006 5:26 PM