Credit Corporation Enactment 1981

This Enactment may be cited as the Credit Corporation Enactment, 1981, and shall come into operation on such date as the Minister may, by notice in the Gazette, appoint.

[1-1-1982.]

The Minister may appoint different dates for the coming into operation of different parts or provisions of the Enactment.

Interpretation.

As from the commencement of this Enactment there shall be constituted “the

Sabah Credit Corporation” which shall be a body corporate with perpetual succession, capable of suing and being sued in its corporate name and with the power to purchase or otherwise acquire, hold, and exchange or alienate or otherwise deal with in any lawful manner whatsoever, and property moveable and immovable, and to enter into contracts and generally to do such acts and things as a body corporate may do by law and as are necessary for, or incidental to, the carrying out of its objects and the exercise of its powers as set out in this Enactment.

The Corporation shall have a common seal which shall bear such device as the

Corporation may approve and such seal may from time to time be broken, changed, altered and made anew by the Corporation, as the Corporation may think fit.

Until a common seal is provided under subsection (2), a stamp bearing the inscription “The Sabah Credit Corporation” may be used as the common seal of the

Corporation.

Composition of Corporation.

The Corporation shall consist of the following members:-

The members as specified in paragraphs (a) (b) (c) and (d) of subsection (1)

shall be appointed by the Yang di-Pertua Negeri.

A member who is an officer in the public service of the State may by instrument in writing addressed to the Chairman appoint another officer in the public service of the State as an alternate member who may attend on his behalf any meeting of the Corporation which such member is for any reason unable to attend and such alternate member when attending such meeting shall for all purposes be deemed to be a member of the Corporation.

Subject to the provisions of section 7 of this Enactment, a member, other than the General Manager, shall hold office for a period of three years from the date of his appointment, and shall be eligible for re-appointment.

Resignation and removal.

A member, other than the General Manager, may at any time resign his office by giving notice in writing to the Chairman;

The appointment of a member may at any time be revoked by the Yang di-Pertua Negeri if he thinks it expedient to do so.

Disqualification from membership.

a person who is of unsound mind or otherwise incapable of performing his duties or managing his affairs;

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a person who is prohibited from being a director of a company under the provisions of any written law relating to companies;

a person who has been convicted of any offence involving fraud, dishonesty or moral turpitude; and

a bankrupt.

Vacation of office.

on his death;

if he is absent from three consecutive meetings of the Corporation without the special leave of the Chairman or leave of absence granted under this Enactment and the Corporation passes a resolution declaring his office vacant;

if he resigns his office;

if he becomes disqualified for membership under section 6 of this Enactment;

if his appointment is revoked by the Yang di-Pertua Negeri.

Leave of absence.

If the office of a member, other than the General Manager, becomes vacant, the

Yang di-Pertua Negeri may appoint another suitably qualified person to fill such vacancy for so long only as the member in whose place he is appointed would have held office.

Where any member, other than the General Manager, is prevented by illness, absence from the State or other like cause from performing his duties as a member the Yang

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di-Pertua Negeri may appoint any suitably qualified person to act as deputy for such member during such period as he is so prevented from performing his duties.

Remuneration of members of Corporation.

Every member of the Corporation and every officer or servant of the Corporation

–

Where any member, officer or servant of the Corporation contravenes any of the provisions of paragraphs (a) or (b) of subsection (1), he shall be guilty of an offence, and shall, on conviction thereof, be liable to a fine of one thousand ringgit and to imprisonment for six months.

Nothing contained in this section shall be deemed to preclude the Corporation from making, with the consent of an applicant, such enquires as the Corporation may deem fit in connection with an application made to it by that applicant.

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The Corporation shall meet as often as may be necessary or expedient for the transaction of its business and such meetings shall be held at such places and times as the

Chairman may determine:

Provided that the Chairman shall not allow more than three months to elapse between such meetings.

Where not less than three members, by notice in writing signed by them and addressed to the Chairman, request that a meeting of the Corporation be held for any purpose specified in such notice the Chairman shall, within seven days of the receipt by him of such notice, convene a meeting accordingly.

Procedure of meetings.

The quorum necessary for the transaction of the business of the Corporation shall be five.

In the absence of the Chairman from any meeting of the Corporation, the Deputy

Chairman shall preside thereat and, in the absence of both the Chairman and the Deputy

Chairman, the members present shall elect one of their number to preside thereat.

Questions arising at any meeting of the Corporation shall be decided by the votes of the majority of those present and voting thereon and in the case of an equality of votes the Chairman or other person presiding at such meeting shall have a second or casting vote.

The Corporation may co-opt any one or more persons to attend any particular meeting of the Corporation on any matter for the purpose or assisting or advising the

Corporation, but such co-opted person shall not have the right to vote.

Subject to the provisions of this Part, the Corporation shall have power to make standing orders to regulate its own proceedings.

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Disclosure by member of Corporation of interest in transaction with Corporation, and disqualification.

Subject to the provisions of this section, it shall be the duty of a member of the

Corporation who is in any way, whether directly or indirectly, interested in an application to the Corporation for a loan or guarantee under the provisions of this Enactment or in a contract or proposed contract with the Corporation or in any company or firm which is in receipt of, or applying for, such a loan or guarantee or which is so interested in such a contract or proposed contract to declare the nature of his interest at a meeting of the

Corporation.

In the case of such application or proposed contract the declaration required by this section to be made by a member of the Corporation shall be made at the meeting of the

Corporation at which the question of granting or refusing the application or entering into the contract is first taken into consideration, or if such member is not present at such meeting then at the next meeting which he attends, or if such member was not at the date of such meeting interested in the application or proposed contract or did not on the said date have an interest in any such firm or company as is referred to in subsection (1), the said declaration shall be made at the next meeting of the Corporation after he become so interested or acquired such an interest.

For the purpose of this section, a general notice given to the other members of the Corporation by a member to the effect that he is also a member of a specified company or firm and is to be regarded as interested in any application for a loan or guarantee from the

Corporation or in any contract which may, after the date of the notice, be made by or with that company or firm, shall be deemed to be a sufficient declaration of interest in relation to any application or contract so made:

Provided that no such notice shall be of effect unless either it is given at a meeting of the

Corporation or the member of the Corporation concerned takes reasonable steps to secure that it is brought up and read at the next meeting of the Corporation after it is given.

No member of the Corporation shall sit or take part in proceedings or vote on the decision of any application to the Corporation for a loan or guarantee or in respect of any contract or arrangement in which he is interested whether directly or indirectly, and whether

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personally or by virtue of an interest in any company or firm, and if he shall vote his vote shall not be counted.

Any member of the Corporation who fails to comply with any of the provisions of subsections (1), (2) and (3) or contravenes any of the provisions of subsection (4) shall be guilty of an offence, and shall, on conviction thereof, be liable to a fine of one thousand ringgit and to imprisonment for six months.

Power to appoint committee.

Subject to the provisions of this Enactment, the Corporation may, for any general or special purpose, appoint such committees as it thinks desirable.

A committee may do all such things as may be necessary for the effective carrying out its functions but shall be subject to the general directions of the Corporation.

A committee shall consist of a Chairman and not more than five other persons.

A committee may consist of persons who are not members of the Corporation.

Members of a committee may be paid such remuneration or allowance as the

Corporation may, with the approval of the Minister, determine.

Meetings of a committee.

In the absence of the Chairman of a committee from any meeting of the committee such other member of the committee as may be elected by the members present shall preside over the meeting.

The quorum for the meeting a committee shall be three.

Any question to be determined at any meeting of a committee shall be decided by the votes of the majority of those present and voting thereon, and in the case of an equality of votes the person presiding shall have a second or casting vote.

A committee may invite to any of its meetings any person who can in its opinion contribute to its deliberations but such a person shall have no right to vote at the meeting.

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Subject to this section and the directions of the Corporation, a committee shall regulate its own procedure.

Delegation of powers.

The Corporation may delegate to any committee, member, officer or servant of the Corporation, such of its as it may deem necessary or desirable.

Any functions delegated under this section –

No delegation made under this section shall preclude the Corporation itself from exercising or performing at any time any of the functions so delegated.

Power of Chairman to delegate.

Subject to the provisions of this Enactment and to any regulations made thereunder, the Chairman may delegate in writing to any member, officer or servant of the

Corporation the power and authority to carry out on his behalf such duties, powers or functions as he may determine.

The Chairman may at the time of delegating any power or authority under subsection (1) to any member, officer or servant, or at any time thereafter give directions as to the manner in which such delegated power or authority is to be exercised and may at any time revoke, modify or increase such delegation.

Execution of documents, etc.

The common seal of the Corporation shall be in the custody of the Chairman and shall not be used except in the presence of the Chairman or Deputy Chairman and one member and such use shall be authenticated by the signature of such persons and such

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authenticated shall be sufficient evidence that such seal was duly and properly fixed and that it is the lawful seal of the Corporation.

All documents including mortgage, lease, assignment, transfer and agreements other than those required by law to be under seal, to which the Corporation is a party may be signed on behalf of the Corporation by the Chairman or any member or by any officer or servants generally or specially authorised in that behalf by the Corporation.

All documents, other than those required by law to be under seal made by, and all decisions of, the Corporation may be signified under the hand of the Chairman and the

Secretary.

Vacancy not to invalidate acts, etc.

No act or proceeding of the Corporation or any committee thereof shall be questioned on account of any vacancy among the member or on account of the appointment of any member having been defective.

Until the contrary is proved, every meeting of the Corporation or of any committee thereof shall be deemed to have been duly convened and held and all members present thereat shall be deemed to have been duly qualified.

A statement in any document to the effect that any function has been delegated under this Part shall, unless the contrary is proved, be evidence that such delegation has been lawfully made.

Subject to section 22, the Corporation shall appoint a General Manager with the approval of the Minister, and such other officers and servants as may be necessary for carrying out its functions and duties under the Enactment.

Whenever the General Manager is prevented by illness, absence from the State, or other like cause from performing his duties as such, or when the office of General

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Manager is vacant, the Corporation may appoint one of its officers to perform the duties of

General Manager during such period as the General Manager is so prevented from performing his duties or the said office is vacant.

Subject to the approval of the Government, the General Manager and other officers and servants of the Corporation shall be engaged on such terms and conditions as the Corporation may think fit.

Restriction on alterations in establishment.

The General Manager shall be the chief executive officer responsible to the

Corporation and shall perform such duties and exercise such powers as may be determined or delegated by the Corporation.

Subject to the directions and control of the Corporation, all officers and servants of the Corporation shall be under the administrative control of the General Manager.

Officer or servant not to be interested in contracts.

No person shall be eligible for employment as an officer or servant of the

Corporation who has, directly or indirectly, by himself or his partner, any share or interest in any contract with, for or on behalf of the Corporation.

Any officer or servant of the Corporation who has or acquires any such share or interest shall be liable in the discretion of the Corporation to summary dismissal without notice.

No officer or servant shall be deemed to have or acquire any such share or interest by reason only that –

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It shall be the duty of the Corporation to promote the economic development of

Sabah and with that object to provide or facilitate the grant of financial credits where necessary and desirable and to stimulate and facilitate private investment in Sabah by local and external capital.

The Corporation shall in pursuance of the discharge of its duties provide and facilitate the grant of credits for agriculture, industry, rural and urban housing and building, and utilities both of a public and private nature and other undertakings of a like nature.

Without prejudice to the generality of the provisions of subsection (2), the functions of the Corporation in the discharge of its duties shall be to –

The Corporation shall have power for the purpose of the discharge of its duties.

Where an officer in the public service who holds a pensionable office within the meaning of the Pensions Act, 1980 [Act 227], is appointed to be an officer of the Corporation, the Corporation shall pay to the Government an annual pension contribution at such rate per centum of the officer’s annual emoluments from the Corporation as may, from time to time, be approved by the Yang di-Pertua Negeri, and the service of such person while in the

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employment of the Corporation shall be deemed to be service under the Government and shall be subject to the provisions of the Pensions Act, 1980 [Act 227], as amended from time to time.

General powers of Corporation to transact business.

The Corporation may from time to time appoint and employ valuers and inspectors at such remuneration and on such terms as the Corporation may determine and may in its discretion remove any person as appointed.

The fee of any valuer or inspector shall be fixed by the Corporation.

Any valuer or inspector appointed under this section may, at all reasonable times, enter upon lands or premises in respect of which a loan or guarantee has been made or granted under the provision of this Enactment and may value or inspect the same and any person obstructing or causing to be obstructed any valuer or inspector in making such valuation or inspection, whether by force or by threats or in any other manner shall be guilty of an offence and shall, on conviction thereof, be liable to a fine of two hundred and fifty ringgit or imprisonment for six months.

Power of corporation to establish offices or agencies.

The Corporation may sub-divide Sabah into areas for the purposes of this

Enactment, and may, in each of the areas so created, constitute a local committee consisting of such members or other persons as the Corporation may appoint.

The Corporation may, as it thinks fit, at any time and from time to time, alter the boundaries of any area or make a new subdivision of Sabah into areas.

The Corporation may, as it thinks fit, revoke any appointment made by the

Corporation to any local committee, and increase or reduce the number of members of any local committee.

A local committee shall perform such function as the Corporation may direct but not including the grant of a loan or guarantee.

The funds and resources of the Corporation (hereinafter referred to as “the

Fund”) shall consist of –

The Corporation may from its funds and resources –

Interest shall be paid by the Corporation to the Government at such rate (if any)

as may be determined by the Government on any amount specified in paragraph (a) of subsection (1).

The annual charges on any amount which may be allocated to the Corporation from the proceeds of loans raised by Government under paragraph (b) of subsection (1) shall be met by the Corporation:

Provided that all or any part of such charges may be met from the general revenue of

Sabah subject to the approval of the Legislative Assembly.

The balance of the revenue of the Corporation may be applied to the payment of such dividend on shares and stock issued by the Corporation as the financial position of the

Corporation appears, in the opinion of the Corporation, to warrant such payment.

Power to issue shares.

It shall be the duty of the Corporation so to exercise and perform its functions as to secure that its revenues are not less than sufficient to meet all sums properly chargeable to its revenue account taking one year with another.

Any excess of the revenues of the Corporation for any financial year thereof over the sums properly chargeable to its revenue account for that year shall be applied by the

Corporation for such purposes as it may determine.

Investment of funds.

The Corporation may, from time to time, with the approval of the Minister, borrow money by the issue of debenture stock or otherwise as the Minister may direct for the purposes of this Enactment.

The Corporation may, from time to time, for the purpose of this Enactment, raise loans from the Government, or with the consent of the Minister, borrow by way of a temporary loan or overdraft from a bank licensed under the provisions of the Banking Act,

1973 [Act 102.], or otherwise.

Loans may be secured by mortgages.

Subject to such conditions as the Minister may deem fit to impose in particular cases, the Corporation may, out of the Fund, make loans in accordance with the provisions of this Enactment in that behalf, in the execution of its duties or in the discharge of its functions under section 25.

In making loans under the provisions of subsection (1) the Corporation may charge such rate of interest as it may deem fit in any particular case.

Subject to the provisions of sections 37 and 38, every loan shall be repaid to the

Corporation in accordance with the terms and conditions under which such loan was made and the moneys so paid shall thereupon be taken into accounts of the Corporation.

Every mortgage to secure loan and every instrument or charge under the provisions of this Enactment shall be approved by the Corporation, and all costs, charges

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and expenses incurred in connection therewith shall be paid by the person to whom the loan is made.

Power to guarantee loans.

postpone the payment of any sum due for principal or interest to it in respect of a loan made by the Corporation upon such terms and conditions for the carrying out of the purposes for which such loan was made and for the ultimate repayment of such principal or payment of such interest as it may deem necessary;

from time to time extend the period for repayment of any loan, or compound or release any loan or any part thereof subject to such terms and conditions as it may deem fit.

Payment of loan before due date.

When any loan has been made for the cultivation of crops and the expenses of reaping and making merchantable such crops, all the crops and produce reaped or gathered from the land shall, until such advance has been repaid, be dealt with and disposed of as the

Corporation may direct, and, until so disposed of, shall be held by the person obtaining the

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loan in trust for the Corporation. Any person to whom a loan has been made, who disposes of any such crops or produce except in the manner directed by the Corporation or by this

Enactment or permitted by the express provisions of any document executed by or with the authority of the Corporation affecting such loan, shall be guilty of an offence and shall, on conviction thereof, be liable to a fine of one thousand ringgit, and imprisonment for six months.

It shall be lawful for the Corporation to enter into agreement, with or without security and on such condition as it thinks fit to impose, with any person dealing in or processing agricultural produce of any kind, for the disposal of produce belonging to any person to whom loans shall have been made under the provisions of this Enactment in respect of such produce. The Agreement shall provide for the sale without undue delays of such produce and the immediate payment to the Corporation of the proceeds of such sale or such part thereof as the Corporation shall think fit to the credit of the person to whom the loan was made.

Any person entrusted with the disposal of the produce of any person obtaining a loan under the provisions of this Enactment who shall fail to pay the proceed of sale to the

Corporation as provided in subsection (2) shall be guilty of an offence and shall, on conviction thereof, be liable to a fine of five hundred ringgit and imprisonment for six months.

Mortgages and charges to be approved by Corporation.

Where the Corporation has made a loan or has guaranteed any loan of money under the provisions of this Enactment it may –

The Corporation may authorise in writing any of its officers or servants, or any other person to make such examination, and the person, body or authority in receipt of the loan shall produce to such officer or servants, or person all the books, documents and other matters and things necessary for the purposes of the examination.

Any person who fails to comply with any of the provisions of paragraph (b) of subsection (1) or any of the provisions of subsection 2 shall be guilty of an offence and shall, on conviction thereof, be liable to a fine of one thousand ringgit and imprisonment for six months.

Order of Corporation upon such examination.

any sum of money, whether principal or interest, due in respect of any loan made under this Enactment remains unpaid; or

in the opinion of the Corporation, any prior loan made under this Enactment has not been applied for the purpose for which it was made or has not been carefully and economically expended; or

the borrower has become insolvent or has been sentenced to a term of imprisonment without the option of the payment of a fine or has assigned his estate for the benefit of creditors; or

there has been a breach or non-observance of any condition attached to the loan; or

in the opinion of the Corporation, the sums already advanced were not applied to the purposes for which the loan was made within reasonable time;

then without prejudice to any other remedy the Corporation may, or, as the case may be, the bank may refuse to advance any portion of the loan still outstanding.

Misapplication of loan secured by mortgage or otherwise.

No loan or part thereof made under the provisions of this Enactment shall be applied otherwise than for such purposes as may be authorised by the Corporation under this

Enactment or by any regulation made thereunder.

If any loan made under the provisions of this Enactment or any part of such loan has been misapplied the Corporation may –

Where any loan by a bank is secured by a guarantee by the Corporation no such loan or any part thereof shall be applied otherwise than for such purposes as shall have been approved by the bank, the Government, or the Corporation at the time of the grant of such loan and if such loan or any part thereof shall have been applied otherwise than for purposes so approved then the bank may exercise any of the powers conferred on the

Corporation by subsection (2).

The provisions of subsection (2) shall be in addition to any other proceedings under any written law.

Enforcement of securities.

the obligation imposed by this section on the Official Receiver and court officials shall not in any case arise unless the Corporation or the bank, on or before the date of the sale, gives notice in writing to the Official Receiver or such official, as the case may be, of the existence of an unpaid loan or loans, and unless within seven days after the sale the Corporation gives further notice in writing to the

Official Receiver, or such official, as the case may be, of the amount thereof;

and

the obligation imposed by this section on the Collector shall only arise in sales in execution for the purpose of enforcing payment of a judgement debt of a judgement creditor or in execution of a registered encumbrance or for arrears of land revenue, and shall not in any case arise unless the Corporation not later than the day before the day of the sale has given to the Collector notice in writing of the existence of the amount of the unpaid loan.

Offences in respect of loans.

obtains a loan or guarantee from the Corporation under the provisions of this

Enactment by means of any false representation;

wilfully applies any loan made to him by the Corporation or made to him by any bank in pursuance of a guarantee given by the Corporation or the Government to any purpose other than the purpose for which the loan was made;

having obtained a loan from the Corporation or from a bank in pursuance of a guarantee given by the Corporation or the Government, wilfully destroys any security given in relation to any such loans, shall be guilty of an offence against this Enactment and shall, on conviction thereof, be liable to a fine of one thousand ringgit, and imprisonment for twelve months.

False statements.