Bursa Malaysia issues Consultation Paper on Enhanced Corporate Rescue Mechanism Disclosure Framework and New Category of Exempted Related Party Transaction
09 June 2025
On 29 May 2025, Bursa Malaysia Berhad (“Bursa Malaysia”) issued Consultation Paper No. 1/2025 (“CP1/25”) seeking feedback from the public on the proposed amendments to the MAIN Market Listing Requirements (“MAIN LR”), ACE Market Listing Requirements (“ACE LR”) and LEAP Market Listing Requirements (“LEAP LR”) (collectively “LR”) of Bursa Malaysia Securities Berhad (“Exchange”).
The key proposed amendments are as follows:
| a) |
in relation to the LR, to enhance disclosures and transparency on corporate rescue mechanisms under the Companies Act 2016 (“CA 2016”) involving a listed issuer, its subsidiaries or major associated companies1; and |
| b) |
in relation to the MAIN LR and the ACE LR, to promote a more balanced and proportionate framework governing a related party transaction (“RPT”) by exempting a transaction involving a joint venture (“JV”) partner of a related party, subject to prescribed conditions. |
The proposed amendments to the LR in relation to corporate rescue mechanisms arose as a result of the extension of the provisions on judicial management (“
JM”) and corporate voluntary arrangement (“
CVA”) in the CA 2016 to listed companies on 1 April 2024
2 and 31 January 2025
3 respectively.
Proposed amendments to MAIN LR, ACE LR and LEAP LR on JM and CVA
It is proposed that:
Immediate Announcement Requirement
| 1. |
a new paragraph 9.19(19A), rule 9.19(20A) and rule 6.11(10A) be introduced to the MAIN LR, ACE LR and LEAP LR respectively to require a company listed on the Main Market (“listed issuer”), a company listed on the ACE Market (“ACE listed corporation”) and a company listed on the LEAP Market (“LEAP listed corporation”), as the case may be, to make an immediate announcement to the Exchange of the following: |
| a) |
any corporate rescue mechanism involving the listed issuer/ ACE listed corporation/ LEAP listed corporation, as the case may be, or any of its subsidiaries or major associated companies in accordance with the CA 2016 as follows:
- any application filed with a court for a judicial management order (“JMO”), including any application for the appointment of an interim judicial manager;
- any proposal filed with a court for a proposed CVA; and
- any material development arising from the application for a JMO (including the grant of a JMO by a court) or proposed CVA;
|
| b) |
in the case of a listed issuer/ ACE listed corporation:
- the announcement pertaining to the application for a JMO (including any application for the appointment of an interim judicial manager) must include the information contained in Part C(A) of Appendix 9A of the MAIN LR/ ACE LR, and if a JMO is granted, the announcement must include the information contained in Part C(B) of Appendix 9A of the MAIN LR/ ACE LR, as applicable;
- the announcement pertaining to a proposed CVA must include the information contained in Part C(C) of Appendix 9A of the MAIN LR/ ACE LR, as applicable; and
|
| c) |
in the case of a LEAP listed corporation, the announcement must include the operational and financial impact on the group arising from the JM or CVA, as the case may be, including the details of any restraints or restrictions imposed on the group; |
| 2. |
the existing paragraph 9.19(21)/ rule 9.19(22)/ rule 6.11(12) of the MAIN LR/ ACE LR/ LEAP LR respectively relating to announcements on court restraining orders against a listed issuer/ ACE listed corporation/ LEAP listed corporation or its subsidiaries or major associated companies, be amended to include information on any restriction that apply to the affected entity as a result of the restraining order; |
New Part C(A) – Announcement relating to application for a JMO (including appointment of an interim judicial manager)
| 3. |
an announcement under paragraph 9.19(19A)/ rule 9.19(20A) of the MAIN LR/ ACE LR in relation to an application for a JMO (including appointment of an interim judicial manager) must include the information set out in the new Part C(A) of Appendix 9A of the MAIN LR/ ACE LR, namely: |
| a) |
the date the application for the JMO (“application”) was filed with the court, the hearing date for the application, and the date the application was served on the listed issuer/ ACE listed corporation, its subsidiary or major associated company, as the case may be; |
| b) |
the details of the application, including the amount claimed under the application and the default or circumstances leading to the filing of the application; |
| c) |
where the application is in respect of a subsidiary, a confirmation as to whether the subsidiary is a major subsidiary4; |
| d) |
the operational impact on the group arising from the application and appointment of the interim judicial manager (if applicable), including any restraints or restrictions imposed on the group and details of such restraints or restrictions; |
| e) |
the financial impact on the group arising from the application and appointment of the interim judicial manager (if applicable), including expected losses, if any; |
| f) |
the steps taken or proposed to be taken by the listed issuer/ ACE listed corporation in respect of the application, including whether leave of court will be sought to disapply any restraints or restrictions imposed on the group in the event a JMO is procured against the listed issuer/ ACE listed corporation, any of its subsidiaries or major associated companies; and |
| g) |
if an interim judicial manager is appointed:
- the date of appointment and particulars of the interim judicial manager;
- its functions and powers; and
- the role of the board of directors in light of its appointment;
|
New Part C(B) – Announcement relating to a JMO
| 4. |
an announcement under paragraph 9.19(19A)/ rule 9.19(20A) of the MAIN LR/ ACE LR in relation to the grant of a JMO must include the information set out in the new Part C(B) of Appendix 9A of the MAIN LR/ ACE LR, namely: |
| a) |
the terms, date of commencement and duration of the JMO; |
| b) |
the particulars of the judicial manager appointed and its functions and powers; |
| c) |
the operational impact on the group arising from the JMO and appointment of the judicial manager, including any restraints or restrictions imposed on the group and details of such restraints or restrictions; |
| d) |
the financial impact on the group arising from the JMO and appointment of the judicial manager, including expected losses, if any; |
| e) |
the steps taken or proposed to be taken by the listed issuer/ ACE listed corporation in respect of the JMO and appointment of the judicial manager; and |
| f) |
the role of the board of directors in light of the appointment of the judicial manager; |
New Part C(C) – Announcement relating to a proposed CVA
| 5. |
an announcement under paragraph 9.19(19A)/ rule 9.19(20A) of the MAIN LR/ACE LR in relation to a proposed CVA must include the information set out in the new Part C(C) of Appendix 9A of the MAIN LR/ ACE LR, namely: |
| a) |
the date when the proposed CVA under section 398 of the CA 2016 is filed with the court; |
| b) |
the terms of the proposed CVA and the events or circumstances leading to the proposed CVA; |
| c) |
where the proposed CVA is in respect of a subsidiary, a confirmation as to whether the subsidiary is a major subsidiary; |
| d) |
the operational impact on the group arising from the proposed CVA and the appointment of the nominee5, including any restraints or restrictions imposed on the group under any moratorium in force and details of such restraints or restrictions; |
| e) |
the financial impact on the group arising from the proposed CVA and appointment of the nominee, including expected losses, if any; |
| f) |
the steps taken or proposed to be taken by the listed issuer/ ACE listed corporation in respect of the proposed CVA, including whether leave of court will be sought to disapply any restraints or restrictions under the moratorium; and |
| g) |
the following details relating to the nominee appointed for the proposed CVA:
- the date of appointment and particulars of the nominee;
- its functions and powers; and
- its opinion under section 397(2) of the CA 2016;
|
Proposed amendment to Part F of MAIN LR and ACE LR
| 6. |
Part F of Appendix 9A of the MAIN LR/ ACE LR relating to the contents of announcements pertaining to restraining orders be amended as follows: |
| a) |
a new paragraph (aA) will require the disclosure of details of any restrictions that apply to the group of the listed issuer/ ACE listed corporation, as the case may be, as a result of the restraining order; and |
| b) |
a new paragraph (e) will require a statement as to whether a subsidiary, holding company or ultimate holding company of the listed issuer/ ACE listed corporation is applying for a restraining order under section 368A of the CA 2016 and details of such application, if applicable. |
Proposed amendments to MAIN LR and ACE LR on RPT
It is proposed that a new paragraph 10.08(11)(r)/ rule 10.08(11)(r) be introduced to the MAIN LR/ ACE LR respectively to provide that the following transaction is not normally regarded as an RPT:
| a) |
a transaction between the listed issuer/ ACE listed corporation or any of its subsidiaries and another person where there are no other interested relationships except for:
- a person connected with a major shareholder of the listed issuer/ ACE listed corporation being a JV partner of the major shareholder pursuant to a minor joint venture (“Scenario A”); or
- a major shareholder of the listed issuer/ ACE listed corporation being a JV partner of the major shareholder of the other person pursuant to a minor joint venture (“Scenario B”),
(each of the first person mentioned in Scenario A and Scenario B is referred to as the “said related party”) provided that the following conditions are satisfied:
(i) the said related party is not a party to the said transaction, initiator, agent or involved in any other manner in the said transaction;
(ii) the said related party does not have any representative in an executive capacity on the board of directors of the listed issuer/ ACE listed corporation or any of its subsidiaries; and
(iii) the said related party is:
- a statutory institution that manages funds belonging to the general public; or
- a closed end fund, unit trust or investment fund (excluding an investment holding corporation); or
- an insurance corporation whose activities are regulated by any written law relating to insurance and are subject to supervision by Bank Negara Malaysia or an equivalent foreign regulatory authority as the Exchange deems appropriate, and the said insurance corporation is managing its insurance fund6 (together with its own shareholders' funds or otherwise),
(the conditions mentioned in subparagraphs (i) to (iii) above are collectively referred to as the “relevant conditions”). |
For the purpose of the proposed new paragraph 10.08(11)(r)/ rule 10.08(11)(r) of the MAIN LR/ ACE LR, a “
minor joint venture” refers to a joint venture or multiple joint ventures where the total capital and investment outlay of the said related party in all the subsisting joint ventures with the major shareholder of the listed issuer/ ACE listed corporation or the major shareholder of the other person, as the case may be, is less than 5% of the total assets of the said related party based on its latest audited consolidated financial statements.
Refer to paragraph 40 of CP1/25 for illustrations of Scenario A and Scenario B.
In the opinion of the Exchange, the proposed RPT exemption is necessary and appropriate taking into account the landscape of the Malaysian capital market. The Exchange is also of the view that the imposition of the relevant conditions will maintain the integrity of the proposed transaction, ensure that the potential conflict of interest is mitigated and uphold the principles of fairness and transparency for the following reasons:
| a) |
the said related party is not in a position to exert influence or control over the listed issuer or the transaction due to its non-involvement in the transaction and absence of board executive position; |
| b) |
the said related party’s status as a regulated or licensed entity managing funds for the general public requires it to act in the best interest of the beneficiaries or policyholders, instead for its own interest; and |
| c) |
in light of the said related party’s immaterial financial commitment towards the joint venture (less than 5% of its total assets), the potential conflict of interest arising from the JV relationship is remote or pose insignificant risk for the said related party to abuse its position in favour of its JV partner. |
Deadline for feedback
Feedback on the proposed amendments to CP1/25 may be submitted in writing to Bursa Malaysia by
10 July 2025.
Comments
The proposed amendments relating to JM and CVA are necessary given that the provisions in the CA 2016 on these corporate rescue mechanisms have been extended to listed entities since 30 April 2024 and 31 January 2025 respectively.
The proposed amendment on RPT will be welcomed by managers of large funds, such as the Employees Provident Fund (EPF), Lembaga Tabung Angkatan Tentera (LTAT), Kumpulan Wang Persaraan (Diperbadankan) (KWAP) and the funds managed by Amanah Saham Nasional Berhad (ASNB) as they may be permitted to vote on a transaction where their JV partner is a shareholder of a party that is interested in a transaction involving a listed entity or its subsidiary, subject to all the relevant conditions being satisfied.
Reference materials:
Bursa Malaysia CP1/25
Annexure A of CP1/25 – Proposed Amendments to MAIN LR
Annexure B of CP1/25 – Proposed Amendments to ACE LR
Annexure C of CP1/25 – Proposed Amendments to LEAP LR
Article by Phua Pao Yii (Partner), Tan Wei Liang (Partner) and Kok Chee Kheong (Consultant) of the Corporate Practice of Skrine.
1 A “major associated company” is an associated company which contributes 70% or more of the profit before tax or total assets employed of a listed issuer/ ACE listed corporation/ LEAP listed corporation on a consolidated basis (paragraph 1.01/ rule 1.01/ rule 1.01 of the MAIN LR/ ACE LR/ LEAP LR).
4 A “major subsidiary” is a subsidiary which contributes 70% or more of the profit before tax or total assets employed of a listed issuer/ ACE listed corporation/ LEAP listed corporation on a consolidated basis (paragraph 1.01/ rule 1.01/ rule 1.01 of the MAIN LR/ ACE LR/ LEAP LR).
5 A “nominee” is a person who is appointed as a trustee or supervisor to supervise the implementation of a CVA (section 396(2) of the CA 2016). The nominee must be a person who is qualified to be appointed as an insolvency practitioner and whose powers and duties include those specified in the Seventh Schedule of the CA 2016 (section 394 of the CA 2016).
6 For the purposes of this subparagraph, "insurance fund" has the meaning given to it in section 2 of the Financial Services Act 2013.
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