Compulsory Share Acquisitions: Australian Lessons for Malaysian Regulation

Abstract

This article examines Malaysian law relating to the compulsory acquisition of shares in a general takeover bid, in particular, s 34 of the Securities Commission Act 1993. The drafting of s 34 exposes drafting imperfections and creates uncertainty in determining the 90% threshold required before any compulsory acquisition may take place. This article commences with a discussion on s 34 of the Securities Commission Act 1993. The article then discusses the right of the minority shareholders to stop the company's share from being compulsorily acquired. The article further examines the Australian law on compulsory acquisition in a general takeover bid. Chapter 6A of the Corporations Act (Australia) is discussed in detail in order to throw some light on the discussion. The courts in Australia are in a better position to interpret the provisions on compulsory acquisition of shares, given a handful of cases. This article concludes that there is much room for improvement in the Malaysian law on compulsory acquisitions and there is much to be learned from the Australian experience on the above subject

Keywords: compulsory shares acquisition, takeover

JEL Classification: K22