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contravention or pecuniary penalty order has been granted against them. However,
this section only be invoked if the dishonest intention specified in section 588G(3)
has been proven.
The Malaysian Companies Act imposes a penalty of imprisonment for one year or
five thousand ringgit on any person who is found guilty of an offence under the
Act. 132 This provision is regarded as the main remedy for insolvent trading in the
legislation because a liquidator could only bring a civil action if there has been a
successful conviction under the section. In contrast, the Australian provisions, i.e. the
civil remedy, civil penalty and criminal penalty are independent of each other and
each section can be brought against the directors regardless of the outcome of the
other.
11.3.7 Judicial Analysis of Remedies
This section will focus on judicial interpretations of statutory provisions, examined
in Part 11.3.2. Cases from each jurisdiction will be examined for the purpose of
comparison. The analyses will centre on the nature of the court‘s order, how the
quantum of each award is determined, and the factors which influence the court‘s
decisions and ultimately who benefits from such rewards. Problems which hinder
the enforcement (if any) of the sections will also be examined.
The fraudulent trading in section 213 and wrongful trading in section 214 of the
Insolvency Act 1986 will be explained together because the provisions of the
sections are similar. Likewise, the Malaysian fraudulent trading and insolvent trading
provisions will be grouped together for the purpose of analysis. Because few cases
are being brought before the Malaysian courts under both provisions, reference will
132 Section 303(3) of the Malaysian Companies Act 1965: ―If in the course of the winding up of a
company or in any proceedings against a company it appears that an officer of the company who
was knowingly a party to the contracting of a debt had, at the time the debt was contracted, no
reasonable or probable ground of expectation, after taking into consideration the other liabilities, if
any, of the company at the time, of the company being able to pay the debt, the officer shall be
guilty of an offence against the Act.
Penalty: Imprisonment for one year or five thousand ringgit.‖
339