The Legal 500

Introduction

More and more Malaysian companies are starting to look to investing abroad. This is especially true of companies that are involved in labour intensive industries (manufacturing, electronics, etc) or companies which are looking to penetrate into new markets.

Contributing editor: Casey Cogut

Global Overview Casey Cogut and Sean Rodgers Simpson Thacher & Bartlett LLP 3
European Overview Stephen Hewes and Richard Thexton Freshfields Bruckhaus Deringer LLP 5

The Malaysian Securities Commission (“SC”) has on 15 December 2010 published its revised takeover code.

On 5 April 2010 the Dewan Rakyat (the lower house of the Parliment of Malaysia) passed the Strategic Trade Act ("STA") introducing Malaysia's first legislation to restrict trade in weapons of mass destruction ("WMD"). It is anticipated that the provisions of the Act will come into effect in July 2011.

On 22 April 2010, Dewan Rakyat, Malaysia’s House of Representatives, passed the Competition Bill 2010 and the Competition Commission Bill 2010. Broadly, the Competition Bill 2010 provides for laws prohibiting anti-competitive agreements and abuse of dominance. Whereas the Competition Commission Bill 2010 deals with the establishment of a competition commission to administer and enforce the approved Competition Act 2010 (“Act”). This article provides an overview of the key provisions of the Competition Act.

The listing of special purpose acquisition companies Spacs on the main Market Bursa Malaysia Securities Berhad was introduced in May 2009 as part of a number of measures comprised in a new regulatory framework. In a joint launch of the new framework on August 3 2009, the Securities Commission and Bursa expressed the hope that the competitiveness of the Malaysian bourse as an equity-raising and listing destination will be enhanced and that the advent of Spacs, in particular, will not only promote private equity activity but also spur corporate transformation and encourage mergers and aquisitions.

In an economic downturn, many companies may find themselves in a position of not being able to pay their debts when they are due. Being in this position is precarious, as there is a risk of the company being wound up, causing hardships to employees, creditors and shareholders. In addition to that, creditors will rush to enforce the debts owing to them, which is usually a disorderly lead to the demise of the company. But there are mechanisms in place to address the inability to pay debts, depending on what the cause is.

In Asia, where innumerable companies have succesfully listed on their respective national or overseas exchanges, there has also been a growing trent to delist or go private.

After more than 50 years, steps were finally taken to arbitration in Malaysia. The introduction of the Arbitration Act 2005 was seen as a unique opportunity to address the problems that have plagued the arbitration process in Malaysia. The problem that needed to be addressed mainly revolved around delays and increasing judicial interference in the arbitration process.

Malaysia is a democratic country that practises Parliamentary Democracy. The country is headed by a constitutional monarch, His Majesty the Yang di-Pertuan Agong, as the Supreme Head of the country. The Yang di-Pertuan Agong is elected for a five year term among the nine hereditary Sultans of the Malay states; whilst the other four states, which have titular Governors, do not participate in the selection.

Abridged version of paper presented by Kelvin Loh Hsien Han at the Conference on Legal and Tax Aspects of Joint Ventures and Mergers & Acquisitions organized by the Asia Business Forum on 28 February 2008 at JW Marriot Hotel, Kuala Lumpur

Several exciting developments have taken place in the Malaysian corporate landscape, including the liberalisation of sectors, which were traditionally somewhat protected. These liberalisation initiatives are aimed at welcoming more foreign businessmen to explore the many opportunities of the Malaysian market. In its ongoing efforts to support businesses to flourish, Azmi & Associates provides some practical insight into doing business in Malaysia – from a businessman’s point of view.