Corporate Voluntary Arrangement: Form of Notification for Advertisement of End of Moratorium Amended
11 April 2023
The Corporate Voluntary Arrangement (‘CVA’) was introduced under Subdivision 1 of Division 8 of Part III of the Companies Act 2016 (‘CA 2016’). These provisions came into force on 1 March 2018 together with the Companies (Corporate Rescue Mechanism) Rules 2018 [P.U.(A) 64/2018] (‘the Rules’).
Paragraphs 5 to 8 of the Eighth Schedule to the CA 2016 (‘the Eighth Schedule’) states that a moratorium under section 398 of the CA 2016 in relation to a CVA shall end:
- at the end of the day of the meeting summoned under section 399 of the CA 2016, unless it is extended under paragraph 3 of the Eighth Schedule (paragraph 5);
- at the end of the day to which a moratorium is extended, if such moratorium is extended under paragraph 3 of the Eighth Schedule (paragraph 6);
- at the end of 28 days after the moratorium commences, if no meeting under paragraph 4 of the Eighth Schedule is summoned by the nominee as required under paragraph 3 of the Eighth Schedule (paragraph 7); or
- if a nominee withdraws his consent to act under the Seventh Schedule of the CA 2016 (paragraph 8).
A nominee is required under paragraph 12 of the Eighth Schedule to carry out the following within seven days after a moratorium comes to an end:
- advertise the fact in the website of the Companies Commission of Malaysia (‘Commission’) and in one widely circulated newspaper in Malaysia in the national language or one widely circulated newspaper in Malaysia in the English language; and
- notify the Court, the Registrar of Companies (‘Registrar’), the company and any creditor of the company of whose claim he is aware, of the end of the moratorium.
Rule 7 of the Rules requires the notification to be given by the nominee to the Court, the Registrar, the company and its creditors under paragraph 12(b) of the Eighth Schedule to be in Form 5 of the Rules (‘Form 5’).
In addition, a form known as ‘Notification for Advertisement of the End of Moratorium’ under paragraph 12(a) and (b) of the Eighth Schedule (‘the Notification Form’) is to be submitted to the Registrar within the 7-day period referred to in paragraph 12 of the Eighth Schedule. The Notification Form has been amended by the Commission on 29 March 2023. The main amendments to the Notification Form are as follows:
- a reference to ‘Rule 7 of the Companies (Corporate Rescue Mechanism) Rules 2018’ has been added to the title of the Notification Form;
- the ground on which the moratorium has ended, which is to be stated in the Notification Form, has been amended in two respects:
- the existing ground ‘Proposed plan accepted in a meeting on (date)’ has been expanded to state ‘Proposed plan accepted / not accepted in a meeting on (date)’; and
- a new ground ‘The moratorium comes to [an] end naturally’ has been added as an additional ground for the end of the moratorium.
- a note has been added requiring Form 5 to be attached to the Notification Form; and
- the grounds to be stated in the Notification Form for the ‘Advertisement of the End of Moratorium’ has been amended to include an additional ground, namely that ‘The moratorium comes to [an] end naturally.’
Additional details relating to the nominee have been added to the Notification Form.
The amended Notification Form can be accessed
here.
Comments
The amendments fill two voids that existed in the previous version of the Notification Form. First, the Notification Form now includes the grounds set out in paragraphs 5 to 8 of the Eighth Schedule as grounds for the termination of the moratorium under a proposal for a CVA. Second, the requirement to attach Form 5 to the Notification Form satisfies the requirements in paragraph 12(b) of the Eighth Schedule and Rule 7 of the Rules insofar as those provisions relate to the notification to be given to the Registrar.
Alert by Grace Teo (Senior Associate) of the Corporate Practice of Skrine.