18 March 2020
Malaysia

Further to our alert on Movement Control Order in Malaysia – Immediate Implications [link], the Federal Gazzette has published the Prevention and Control of Infectious Diseases (Measures within the Infected Local Areas) Regulations 2020 [link] (“the Regulations”). The Regulations are made pursuant to subsection 11(2) of the Prevention and Control of Infectious Diseases Act 1988 [Act 342] and will be effective from 18 March 2020 to 31 March 2020 (“Restricted Period”).

Regulations

The key highlights of the Regulations include:

Ban on gatherings, except for small-size funerals

Gatherings within any infected local area whether for religious, sports, recreational, social or cultural purposes are banned. However, persons may gather or be involved in a gathering for a funeral provided that the number of attendees to such ceremony be kept to the minimum.

Restrictions on movements except for special purposes or essential activities

Journeys from one place to another within any infected local area are not allowed except for the following purposes:

  • to perform any official duty;
  • to make a journey to and from any premises providing essential services, non-essential services or food supply (see Regulation 5);
  • to purchase, supply or deliver food or daily necessities;
  • to seek healthcare or medical services; or
  • any other special purposes as may be permitted by the Director General.

Inter-state journeys from one infected local area to another infected local area are not allowed unless prior written permission of a police officer in charge of a police station is obtained.

Requirements to undergo health examinations for those returning from overseas

Malaysian citizens or permanent residents are required to undergo health examinations upon returning from overseas before proceeding for immigration clearance at any point of entry. They are also required to comply with any order issued by an authorised officer.

Permitted activities for those providing essential and non-essential services

A list as to what constitutes “essential services” is provided in the Schedule of the Regulations and they are:

Banking and financeElectricity and energyFire
Port, dock and airport services and undertakings, including stevedoring, lighterage, cargo handling, pilotage and storing or bulking of commoditiesPostalPrison
Production, refining, storage, supply and distribution of fuel and lubricantsHealthcare and medicalSolid waste management and public cleansing
SewerageRadio communication including broadcasting and televisionTelecommunication
Transport by land, water or airWatere-Commerce
Defense and securityFood supplyWildlife
ImmigrationCustomsHotels and accomodations
Any services or works determined by the Minister as essential or critical to public health or safety

Note that the list is a longer one compared to the earlier list in the Announcement of 16 March 2020 (see our earlier Alert). The list now extends to e-commerce, hotels and accommodations, and any services or works determined by the Minister as essential or critical to public health or safety.

Premises that provide essential services may be opened provided that the number of personnel and patron at the premises are kept to the minimum.

For non-essential services, premises may be opened provided that prior written permission of the Director General is obtained by the owner or occupier of the premises. The Director General is given a discretion to impose any conditions as he thinks fit.

For those that are involved in food supply chain or in selling food and beverages by way of drive-through, take away and delivery, they may be opened subject to any conditions imposed by the Director General as he thinks fit.

Penal offences

Any person who contravenes the Regulations will be considered to have committed an offence and shall, on conviction, be liable to a fine not exceeding RM1,000 or to imprisonment for a term not exceeding six months or to both.

Body corporates may also face potential corporate liability. If any person who, at the time of the commission of the offence was a director, manager, secretary or other similar officer responsible for the management of any of the affairs of the body corporate or was assisting in such management, they may be charged severally or jointly in the same proceedings with the body corporate.

If the body corporate is found guilty of the offence, the body corporate shall be deemed guilty unless the following defences can be proved:

  • that the offence was committed without his knowledge, consent or connivance; and
  • that he took all reasonable precautions and had exercised due diligence to prevent the commission of the offence.

Additional measures by Government Agencies/Authorities

In light of the issuance of the Regulations, the following announcements have been made:

The National Security Council (“NSC”)

The NSC has released a detailed list of what constitutes “essential” and “non-essential” services and the types of activities that are permitted and prohibited which can be accessed here. An unofficial English translation is provided here.

For those that are involved in the manufacturing industry, the NSC has issued a statement, which can be accessed here, allowing for manufacturers of critical products such as food, medical and pharmaceutical, petrochemicals, chemical and electronic factories, to continue to operate within the Restricted Period subject to conditions set out by the Ministry of International Trade and Industry (“MITI”). Such conditions include:

  • minimal workforce or 50% of the workforce for manufacturing while the movement control order is in effect;
  • work-from-home arrangements for critical non-operational staff;
  • to provide MITI with a list of employees working during the Restricted Period;
  • to conduct temperature checks every day and records are to be kept for reference;
  • where the employee has a higher than normal body temperature, the company must inform the Health Ministry and take the recommended measures. In the event where an employee is found to be infected with COVID-19, employers are responsible for the cost of treatment and disinfections; and
  • to provide hand sanitizers at the factory/premise and ensure that disinfection of the premise is done before the start of any shift or operations.

An unofficial English translation is provided here.

Securities Commission of Malaysia (“SC”)

The SC is allowing listed issuers greater flexibility on the timing of annual general meetings (“AGMs”) and issuance of quarterly and annual reports within the Restricted Period. Listed issuers including public listed companies that are required to hold AGMs within the Restricted Period can apply to defer their AGMs with the Companies Commission Malaysia (“CCM”). Additionally, SC has granted a two-month extension for Real Estate Investment Trusts (“REITs”) managers of listed REITs with a financial year-end of 31 December 2019 to hold AGMs by 30 June 2020.

For more information, please see here.

Bursa Malaysia Berhad (“Bursa”)

In line with SC’s announcement, Bursa will also be allowing greater flexibility on the timing of AGMs for listed REITs and issuance of quarterly and annual reports of listed corporations. Any listed corporations which may only hold their AGMs beyond the prescribed six month period as stipulated under the Companies Act 2016 can apply to defer their AGMs with the CCM.

For more information, please see here.

In line with this, the following have been issued:

  • Main Market Listing Requirements Directive on AGMs and Related Issues Amidst COVID-19 Outbreak [link] which provides for:
    • extension of time to hold AGMs for listed corporations;
    • extension of time to hold AGMs for listed REITs; and
    • flexibility of Paragraphs 9.22, 9.23 and 9.25(2) of Main Market Listing Requirements pertaining to annual audited financial statements, auditors’ and directors’ reports and notice of annual AGM.
  • Ace Market Listing Requirements Directive on AGMs and Related Issues Amidst COVID-19 Outbreak [link] which provides for the deferment of AGMs and clarification of Rules 9.22, 923 and 9.25(2) of the Ace Market Listing Requirements pertaining to annual audited financial statements, auditors’ and directors’ reports and notices of annual AGMs.
  • Implementation of the “At-Tick Rule” for Intraday Short-Selling (IDSS), Permitted Short-Selling (PSS) and Short Sale in Day Trading Eligible Securities (DTES) [link] Circular by Bursa Malaysia Securities Bhd.

Inland Revenue Board (“IRB”)

In addition to what was stated in our earlier Alert, the IRB is also extending the deadline for submission of the various income tax return forms by two months from the original deadline.

Employment implications

Employees of business premises that are required to close during the Restricted Period will be entitled to receive their wages and applicable allowances. Work from home arrangements are permissible.

Employers are not to impose pay-cuts or unpaid leave periods unless with the prior agreement of the employees during the Restricted Period.

If you have any questions or require any additional information, please contact Zaid Ibrahim & Co.’s Taskforce at ZI-Covid19@zicolaw.com.


This alert is for general information only and is not a substitute for legal advice.