If it was necessary to sell or transfer assets (including a business) of an insolvent corporate borrower what, if any, are the major difficulties or problems associated with that process (for example restrictions on transfer or sale of land; providing for the transfer or welfare of employees on a sale or transfer of a going concern business)?

If an insolvent corporate debtor is under one of the types of insolvency procedure described previously, the sale of assets or of the business of an insolvent corporate borrower would require the following approvals, without which the transfer or sale would be prohibited or restricted. These may pose difficulties in practice and lead to delays because the process of obtaining such approvals takes time, particularly where more than one regulatory body is involved:

• Sale/purchase of assets/businesses/securities in general - the approval of the Foreign Investment Committee is required if the purchase price exceeds RM5 million or in relation to 15% or more voting interest
• Sale/Purchase of businesses/securities in a manufacturing company - the approval of the Ministry of International Trade and Industry is required.
• Sale/Purchase of securities resulting in a person having 5% or more interest in a financial institution - the approval of the Minister of Finance through Bank Negara Malaysia is required.
• Sale/Purchase of securities in a licensed dealer, fund manager, investment adviser, futures dealer - the approval of the Minister of Finance and Securities Commission if license requires it is required.
• Sale/Purchase of securities resulting in a person having 5% or more interest in an insurance company or controller of an insurance company - the approval of the Minister of Finance through Bank Negara Malaysia is required.
• Sale/Purchase of securities resulting in a person having 5% or more interest in an insurance broker or adjuster or controller of an insurance broker or adjuster - approval of Bank Negara Malaysia is required.
• Sale/purchase of assets/businesses/securities by a listed company - if relative figures exceed 5% in respect of (i) value of assets acquired/disposed compared with total assets of acquiring/disposing company, or (ii) net profits (after deducting all charges except taxation and extraordinary items) attributable to the assets acquired or disposed of compared with those of the acquiring or disposing company, or (iii) aggregate value of the consideration given or received compared with the net assets of the acquiring or disposing company - the approval of the shareholders of the corporate entity is required.
• Sale/purchase of assets/businesses/securities by a listed company - if the consideration is new securities - the approvla of the Securities Commission is required.
• Sale/purchase of assets/businesses/securities by a listed company - if as a result there is a very significant change in business direction or a change in dominant shareholder of the listed company - the approval of the Securities Commission is required. "Very significant change in business direction" is defined as (i) a disposal of existing core assets/businesses for cash, or (ii) acquires new assets/businesses/ interests and the NTA value or after tax profit of these new assets/businesses/interests constitutes more than 50% of the listed company's total relative consolidated figures on completion of the acquisition or disposal
• Sale and purchase of securities in a telecommunication company - if the licence requires it - the approval of the Minister of Telecommunication, Energy and Posts (now known as Multimedia Communications Minister)
• Sale/Purchase of securities other than ordinary shares and irredeemable preference shares by non-residents - the approval of the Controller of Foreign Exchange is required.