The Latest Government Gazette on Debt Threshold for Winding Up


Ranjan N. Chandran, Partner (Commercial & Construction Department)
Harneshpal Karamjit Singh, Associate (Commercial & Construction Department)

Hakem Arabi & Associates

Since the earlier Write-Up titled “The Consequence of Malaysia’s Companies (Exemption) (No. 2) Order 2020”, the Minister of Domestic Trade and Consumer Affairs has exercised the powers afforded to him under Section 466(1)(a) of the Companies Act 2016 (“CA”).

By virtue of the said Government Gazette on 23rd April 2020, the Minister has prescribed the value of indebtedness of a company to be an amount exceeding RM50,000.00 effective from 23rd April 2020 until 31st December 2020.

This then, will be consistent with the Announcement by the Companies Commission Malaysia (“CCM”) on 10th April 2020, that the value of indebtedness under Section 466 of the CA is increased from RM10,000.00 to RM50,000.00 as a temporary protection/moratorium against Winding-Up.

The Authors, however, reiterate the views presented in the earlier write-up concerning the commencement period, whereby the protection/moratorium ought to have commenced as early as 11th March 2020 when the World Health Organization (“WHO”) declared the COVID-19 a pandemic. Alternatively, the protection/moratorium should have commenced from 18th March 2020 when the Movement Control Order (“MCO”) was announced by the Malaysian Government.