Theories, objectives and principles of corporate insolvency law: A comparative study between Malaysia and UK

The corporate insolvency affects many parties that have interests in the continued existence of the company or business and those interests may conflict and cause tensions between them. The existence of corporate insolvency law is associated with an attempt to balance the interests of those who are ‘stakeholders’ in corporate insolvency, such as creditors, employees, local community and the public. Whether the role of insolvency law is to focus on the creditors’ interest or whether insolvency law has more roles to play and wider range of interests to be considered under insolvency laws has pointed to the debates on the underlying principles such as the objectives and theoretical foundations of corporate insolvency law. In view of the importance of theories underpinning corporate insolvency law to a proper understanding of the objectives and principles of the law, it is necessary to review various theories of corporate insolvency. These theories are mostly constructed by scholars in the US and UK in their pursuit of finding the objective of corporate insolvency law. In order to uncover the real objectives or purpose and principles of corporate insolvency law by reviewing corporate insolvency law theories, the authors collected information through secondary data analysis. Sources of the data are textbooks, articles from law journal and law review also report of corporate insolvency. Considering that Malaysian law has been significantly influenced by the English common law, the theories and objectives as well as principles of corporate insolvency law in Malaysia is compared to theories and objectives in the UK. It is recognized that the difference in the underlying theories and objectives produced different types of insolvency principles and rules. This paper will examine the theories of corporate insolvency laws. This paper will also analyse and compare the objectives and principles of corporate insolvency law in Malaysia and UK

Law Enforcement Against Unreported Fishing: What Does Beyond the Catch Record?

Transparency is significant in highly migratory fisheries. The reliability of the catch data is essential for decisions of internationally agreed targets. Nevertheless, the data accuracy will much depend on each state's performance. Focusing on unreported catches of migratory fish, this study highlights the Thunnus Macoyyi (Southern Bluefin Tuna) fishing in Indonesia, as this fish species had experienced for being the limelight of unreported fishing allegations. The main objective is to reveal what are the difficulties that Indonesia is facing on its responsibility to maintain the accuracy of the catch record. Accordingly, the study examines two points by applying the pure legal method and doctrinal approach. Firstly, the international legal framework towards unreported fishing by analysing three main instruments such as the UNCLOS 1982, the UNFSA 1995, and the CCSBT policies. Secondly, it examines Indonesia law enforcement as a State party of regional fisheries organisation. It argues that the international authority could not be completely extended to a State's domestic fishing area. Thus, it gives more discretion to the national law to enforce compliance. Lesson learned from the case study of Indonesia's southern bluefin tuna contributes to unreported fishing literature and allows us to expose the legal gap remained in managing highly migratory fish stocks

Fishing Quota and International Obligation: Why Has Indonesia been Indicated as a Non-Compliant State

Indonesia committed to conserving the tuna resources by participating in some RFMOs. From all regional organizations where Indonesia has been joined, the CCSBT is the unique one, due to it governs a single tuna species, which is called Southern Bluefin Tuna. This kind of tuna is essential for Indonesia because it is the world’s most expensive tuna and SBT migrates through Indonesian fisheries management zones and goes even further within the territorial waters, where the SBT spawning area is located. This natural characteristic distinguishes Indonesia from other Parties to CCSBT. Nevertheless, the Country has been dealing with its obligation to comply with national quota allocation. For some fishing season periods, the CCSBT indicated Indonesia as a non-compliant. By applying the qualitative approach, this study considers how Indonesia’s non-compliance has been addressed in fishing for shared fish stocks. The data collection was conducted through semi-structured interviews and legal analysis of law and policy instruments. This method leads the elaboration to reveal domestic factors affecting non-compliance by Indonesia. This study argues, the fisheries legislation should consider the provision concerning fishing for resources under quota system, hence, it will provide sufficient legal base to take enforcement measures towards non-compliance with fishing quota.

The novel laws on shareholders’ meetings affecting minority shareholders in Malaysia

The purpose of this paper is to examine the potential impact of “Written Resolution” and “No Annual General Meeting” concepts on the minority shareholders in a private company. It surveys the state of the law on shareholders’ meeting as a form of corporate governance before the new concepts were introduced by the Companies Act 2016 on 31st January 2017 and compares it with the latter This paper argues that the new concepts should not have been introduced without any protective measures being provided for the minority shareholders in a private company as a matter of good corporate governance. In this respect, references will be made to similar law on the new concepts and safeguards introduced in the Singapore Companies Act and other similar laws in the Commonwealth countries such as Australia. This paper seeks to identify protective measures for law reform purposes. It will also explore potential practical measures being employed and potential problems faced by private companies registered before the coming into force of the Companies Act 2016, where the annual general meetings are part of its corporate governance system

Corporate rehabilitation: Informal corporate rescue mechanisms for troubled companies in the United Kingdom and Malaysia

Corporate insolvency law aims to provide instruments of corporate survival or rescue.The revival of companies on the brink of economic collapse may involve rescue procedures that go beyond the normal managerial responses to corporations in distress and they may operate through both informal mechanisms and formal legal procedures.Most importantly only viable companies and businesses deserve to be rescued.There are various types of rescue actions to turnaround corporate fortunes at a time of corporate crisis. This could be in the form of a broad range of restructuring activities.This article examines the informal rescue practices and mechanisms available to troubled companies in the UK and Malaysia.Some common rescue mechanisms that are discussed include sell-offs, management buyout (MBO), debt for equity conversion, retrenchment, redundancy as well as ‘workout’ arrangements to restructure debts owed by companies to banks or creditors

Discharge and pre-rehabilitation under bankruptcy law and Islamic law: a boon or a bane?

Repeated calls for a reform of the bankruptcy laws in Malaysia resulted in the renaming of the Bankruptcy Act 1967 (BA 1967) to the Insolvency Act 1967 (IA 1967), which came into force on 6th October 2017. Among the changes made by the IA 1967 are provisions relating to an automatic discharge of bankruptcy and a pre-rehabilitation scheme. Islam prohibits the cancellation of debt since it denies the rightful party from making a claim – however, it does encourage a creditor to be lenient to a debtor. In considering the changes made to the bankruptcy law, this paper examines the provisions on bankruptcy discharge and pre-rehabilitation including the new provisions of automatic discharge and voluntary arrangement (VA). Data for this study comprises primary and secondary data from statutes, case reports, textbooks, and articles from both law and non-legal journals. This paper also analyses the Islamic law’s view of debt, discharge of debt and the concept of pre-rehabilitation. The data for the Islamic component consists of verses from the Holy Quran, Islamic traditions and teachings of Prophet Muhammad PBUH as well as articles from Islamic journals. The paper concludes by showing that VA is the only form of bankruptcy pre-rehabilitation, statutorily granted and available for debtors in Malaysia to avoid bankruptcy, and the introduction of automatic discharge facilitates a quick way out of debt for a bankrupt and enables him to start afresh. The findings also show that the principle of discharge under Islamic bankruptcy law is applicable to debtors who genuinely face hardship to pay their debts. Islam encourages creditors and debtors to enter into negotiation for the settlement of debt instead of the debtors being declared bankrupt due to the inability to pay their debts

The effects of macroeconomic determinants and secured financing of Islamic banks and personal insolvency: an empirical investigation on Malaysia

Recent statistics from the Malaysian Department of Insolvency (MDI), and reports from the Malaysian Credit Management Counseling Agency (CMCA) highlight the increasing number of bankrupt borrowers and borrowers registered under the Debt Management Programme (DMP) organized by AKPK. Rising indebtedness can unfavorably influence economic monetary development as it successfully evacuates people from participating or contributing to the economy. Hence, this research is to investigate the issues of personal insolvency in Malaysia and to analyze several macroeconomic determinants, banking variables and Islamic secured financing that affects personal insolvency. The study attempts to inaugurate a long-run cointegration relationship between personal insolvency and independent variables by employing the Auto-Regressive Distributed Lag (ARDL) bounds testing approach and the Vector Autoregression (VAR) model. Based on quarterly data covering the period 2007Q1 to 2016Q4, this study documents evidence of a long-run dynamics with strong bidirectional causality between the house price index and personal insolvency in Malaysia. Accordingly, policies leading to a more efficient housing market while reducing the demand and supply gap affecting house prices will reduce insolvency in Malaysia

The effects of macroeconomics determinants and secured financing of Islamic Banks on personal insolvency: an empirical investigation on Malaysia

Recent statistics from the Malaysian Department of Insolvency (MDI), and reports from the Malaysian Credit Management Counseling Agency (CMCA) highlight the increasing number of bankrupt borrowers and borrowers registered under the Debt Management Programme (DMP) organized by AKPK. Rising indebtedness can unfavorably influence economic monetary development as it successfully evacuates people from participating or contributing to the economy. Hence, this research is to investigate the issues of personal insolvency in Malaysia and to analyze several macroeconomic determinants, banking variables and Islamic secured financing that affects personal insolvency. The study attempts to inaugurate a long-run cointegration relationship between personal insolvency and independent variables by employing the Auto-Regressive Distributed Lag (ARDL) bounds testing approach and the Vector Autoregression (VAR) model. Based on quarterly data covering the period 2007Q1 to 2016Q4, this study documents evidence of a long-run dynamics with strong bidirectional causality between the house price index and personal insolvency in Malaysia. Accordingly, policies leading to a more efficient housing market while reducing the demand and supply gap affecting house prices will reduce insolvency in Malaysia