Chief executive officer Datuk Zahrah Abd Wahab Fenner said the law was a small part of the Companies Act 1965, previously under Division 5 Part 4, which has now been repealed, and applied primarily to protect consumers in golf, recreational clubs, memorial parks and time-share schemes.
"Basically, interest scheme involves the pooling of financial contribution from the public in exchange for an interest in a particular scheme.
"Currently, there are about 204 interest schemes registered under the Act, including golf clubs, memorial parks, properties and agricultural activities, all of which are under the 'Bhd' status with total funding raised of RM20.6 billion.
"With the new Act, we have also extended the legislation to include private limited (Sdn Bhd) companies, thus giving the opportunity to the SMEs to raise funds under interest scheme," she told reporters after opening SSM's one-day conference themed, "Interest Schemes Act 2016: Alternative Financing for Business Growth' in Kuala Lumpur on Thursday.
Under the new Act, she said the schemes had been divided into three categories - Small and Medium scheme for SMEs, Premium Scheme for public companies and Foreign Scheme for foreign companies incorporated in Malaysia.
Zahrah said for the Small and Medium Scheme, they needed a minimum paid-up capital of RM500,000, and allowed to raise the fund size to between RM1 million and RM10 million.
For Premium Scheme with paid-up capital of RM1 million, the fund size is RM10 million to RM50 million, and for paid-up capital of RM2 million the fund size could be above RM50 million.
Meanwhile, for Foreign Scheme, the paid-up capital was RM5 million and they could raise a fund size of any amount, she added.
Besides that, she said the new scheme also provided strong regulatory control to protect investors' interest.
"This includes a prospectus and contract agreement that can be drafted to be syariah-compliant, as well as legal rights for company registrars to wind up the companies and order them to pay compensation," said Zahrah.
With the Act in place, she said businesses could also leverage the interest schemes to promote cross-sector collaborations to contribute to the growth of Malaysia's economy. - Bernama
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