MALAYSIAN AIRLINE SYSTEM BERHAD (ADMINISTRATION) ACT 2015

Malaysian Airline System Berhad (Administration) laws OF MALAYSIA Act 765 Malaysian airline system berhad (administration) Act 2015 1 2 Laws of Malaysia Date of Royal Assent Act 765 ... ... 30 December 2014 Date of publication in the Gazette ... ... ... 5 January 2015 Publisher’s Copyright C percetakan nasional malaysia berhad All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means electronic, mechanical, photocopying, recording and/or otherwise without the prior permission of Percetakan Nasional Malaysia Berhad (Appointed Printer to the Government of Malaysia). Malaysian Airline System Berhad (Administration) 3 Laws of malaysia Act 765 MALAYSIAN AIRLINE SYSTEM BERHAD (ADMINISTRATION) Act 2015 ARRANGEMENT OF sections Part I PRELIMINARY Section 1. Short title and commencement 2. Application 3. Interpretation Part II ADMINISTRATION 4. Placement of the Company, etc., under administration 6. Duration of administration 5. 7. 8. 9. 10. 11. 12. 13. 14. Appointment of Administrator Qualifications of Administrator Notification of appointment of Administrator Functions of Administrator Powers of Administrator Effect of appointment of Administrator Moratorium Undue preference Transition services 15. Investigation by Administrator 16. Duties of officers to assist in investigation Part III PROPOSAL OF ADMINISTRATOR AND APPOINTMENT OF INDEPENDENT ADVISOR 17. Administrator may re-negotiate contracts or prepare proposal or both 4 Laws of Malaysia Act 765 Section 18. Appointment and qualifications of Independent Advisor 20. Decision of the appointer 19. Review of proposal by Independent Advisor 21. Implementation of proposal 22. Transfer of property or liabilities Part IV MALAYSIA AIRLINES BERHAD 23. Incorporation of Malaysia Airlines Berhad 24. Offer of employment 26. Work rules, code of conduct and regulations 25. 27. 28. Malaysia Airlines Berhad, etc., not a successor employer Negotiation with trade unions and associations Matters relating to productivity or effective utilization of workforce Part V VESTING OF PROPERTY AND LIABILITIES 29. 30. Vesting provisions Replacement vesting order Part VI GENERAL 31. Non-application of section 132e of the Companies Act 1965 32. Indemnity for Administrator, etc. 33. Immunity 34. Limits on the grant of orders of court 36. Things done in anticipation of the enactment of this Act 35. Validity of transaction Schedule 5 Malaysian Airline System Berhad (Administration) laws of malaysia Act 765 MALAYSIAN AIRLINE SYSTEM BERHAD (ADMINISTRATION) Act 2015 An Act to provide special laws for the administration of the Malaysian Airline System Berhad, its wholly owned subsidiary companies, and its partially owned subsidiary companies providing goods or carrying out services or both that are essential to the operations of the Malaysian Airline System Berhad and the appointment of an administrator with the powers to administer and manage the Malaysian Airline System Berhad, its wholly owned subsidiary companies, and its partially owned subsidiary companies providing goods or carrying out services or both; to provide for the establishment of a new entity which will replace the Malaysian Airline System Berhad as the national carrier; and to provide for related matters. [ ] Whereas special provisions are required in the public interest to ensure the continuity of the essential air services by the Malaysian Airline System Berhad as the national carrier and the provision of uninterrupted connectivity to and from and within Malaysia by the national carrier: And whereas legislation is the only means to expeditiously administer and manage the Malaysian Airline System Berhad, its wholly owned subsidiary companies and its partially owned subsidiary companies providing goods or carrying out services or both that are essential to the operations of the national carrier without disruption to their operations: 6 Laws of Malaysia Act 765 And whereas the establishment of a new entity, that is the Malaysia Airlines Berhad, with a new business model is critical to ensure continuity, profitability and viability, and to assume certain businesses, property, rights, liabilities and affairs of the Malaysian Airline System Berhad: And whereas it is in the public interest to ensure the continued existence of a national carrier to facilitate Malaysia’s economic development: And whereas legislation provides an effective, efficient and seamless means to transition the business, property, rights, liabilities and affairs of the Malaysian Airline System Berhad to the new entity: Now, therefore, it is enacted by the Parliament of Malaysia as follows: Part I PRELIMINARY Short title and commencement 1. (1) This Act may be cited as the Malaysian Airline System Berhad (Administration) Act 2015. (2) This Act comes into operation on a date to be appointed by the Minister by notification in the Gazette. Application 2. (1) This Act shall apply— (a) for a period of five years from the date of the coming into operation of this Act; or (b) until the listing and quotation of the shares of the Malaysia Airlines Berhad on the official list of Bursa Malaysia Berhad, whichever is earlier. (2) Notwithstanding subsection (1), the Minister may, by order published in the Gazette, declare an earlier cessation of this Act. Malaysian Airline System Berhad (Administration) 7 (3) Notwithstanding subsection (1), this Act may, by a resolution passed by both Houses of Parliament, be extended for a further period as may be specified in the resolution. Interpretation 3. In this Act, unless the context otherwise requires— “regulatory body” means an authority that is responsible for the enforcement of laws; “proposal” means the proposal under paragraph 17(1)(b); “rights” means all rights, powers, privileges and immunities, whether actual, contingent or prospective; “property” includes all property, movable and immovable, and all interests, easement or rights, whether equitable or legal in, to or out of the property, choses in action, money and goodwill; “Malaysia Airlines Berhad” means the corporation referred to in section 23; “Minister” means the Prime Minister of Malaysia; “officer” has the meaning assigned to it in section 4 and subsection 132(6) of the Companies Act 1965 [Act 125]; “appointer” means the person who appoints an Administrator under section 5; “creditor” includes counterparties in an agreement, contract or arrangement with the Administered Companies; “Independent Advisor” means the person appointed under section 18; “Administrator” means the person appointed under section 5; “Company” means the Malaysian Airline System Berhad; 8 Laws of Malaysia Act 765 “specified subsidiary companies” means the partially owned subsidiary companies listed in paragraph 4(c); “Administered Companies” means the Company, its wholly owned subsidiary companies, and the specified subsidiary companies that have been placed under administration under section 4; “liabilities” includes debts, charges and obligations of every description whether present or future, actual or contingent, and whether payable or to be observed or performed in Malaysia or elsewhere. Part II ADMINISTRATION Placement of the Company, etc., under administration 4. Subject to the prior written approval of the Minister, a member of the Company, or the board of directors of the Company pursuant to a resolution of the board of directors, may place— (a) the Company; (b) any wholly owned subsidiary company of the Company; and (c) the following partially owned subsidiary companies of the Company: (i) Abacus Distribution Systems (Malaysia) Sdn. Bhd. (Company No. 180535-T); (ii) Aerokleen Services Sdn. Bhd. (Company No. 277266-X); and (iii) MAS Awana Services Sdn. Bhd. (Company No. 372384-D), under administration in accordance with this Act. Malaysian Airline System Berhad (Administration) 9 Appointment of Administrator 5. (1) The member of the Company or the board of directors of the Company referred to in section 4 shall appoint an Administrator for the Administered Companies. (2) The appointer may at any time after the appointment of the Administrator under subsection (1) appoint a new Administrator to replace the existing Administrator. (3) Where the Administrator is released from his appointment, he shall, with effect from such release, be discharged from all duties and liabilities in respect of his administration or in relation to his conduct as the Administrator. Duration of administration 6. The administration of the Administered Companies by the Administrator shall commence from the date of appointment of the Administrator under subsection 5(1) and shall continue until the administration is terminated by the appointer. Qualifications of Administrator 7. (1) No person shall be appointed as an Administrator unless he— (a) is a natural person; and (b) has consented in writing to his appointment. (2) The following persons shall be qualified to be appointed as an Administrator: (a) a company auditor approved under the Companies Act 1965; or (b) a person who is, in the opinion of the appointer, capable of performing the duties of an administrator. 10 Laws of Malaysia Act 765 (3) The following persons shall not be qualified to be appointed as an Administrator: (a) an undischarged bankrupt; (b) a mortgagee of any property of the Administered Companies; (c) a person with direct or indirect shareholding in the Administered Companies; (d) a person who is, directly or indirectly, interested in any contract or arrangement to provide goods or services to the Administered Companies; (e) an auditor of the Administered Companies; or (f) an officer of the Administered Companies. Notification of appointment of Administrator 8. (1) The Administrator shall within seven days after his appointment— (a) lodge a notice of the appointment with the Registrar of Companies; and (b) cause a notice of his appointment to be published in at least two national daily newspapers, one of which shall be in the national language. (2) Every invoice, order for goods or services, business letter, cheque, credit note, negotiable instrument or bill of lading which is issued by or on behalf of the Administered Companies or the Administrator after the appointment of the Administrator shall contain the words “Administrator Appointed”. (3) Any non-compliance of subsections (1) and (2) shall not affect the validity of the acts of the Administrator in the administration of the Administered Companies. (4) For the purpose of this section, “Registrar of Companies” has the meaning assigned to it under section 4 of the Companies Act 1965. Malaysian Airline System Berhad (Administration) 11 Functions of Administrator 9. (1) The Administrator shall have the following functions: (a) to carry out the business and operations (including the restructuring of such operations) of the Administered Companies; (b) to take into his custody or under his control the property, liabilities, businesses and affairs of the Administered Companies and all the property to which the Administered Companies are or appear to be entitled; (c) to manage the property, business, liabilities and affairs of the Administered Companies in the name and on behalf of the Administered Companies, including the disposal of property and liabilities; (d) to assume control and exercise all powers conferred on the directors under the Companies Act 1965 or by the constitution of the Administered Companies, and the powers of the directors of the Administered Companies shall then cease except in so far as the Administrator may permit; (e) to make any arrangement or compromise on behalf of the Administered Companies with their creditors or any class of them or between the specified subsidiary companies and their members or any class of them or between the Administered Comp