Press Statement by Parliamentary Opposition Leader, DAP Secretary-General and MP for Petaling, Lim Kit Siang, on Sunday, 5th July 1981:
DAP welcomes Registrar of Companies warning on the law of prospectus and calls on all purchases of holdings shares from companies which have no prospectus to report to the Registrar or any DAP official protect their investment
I welcome the warning by the Registrar of Companies, Encik Zulkifli bin Mahmood, on the law of prospectus requiring every application form of shares to be accompanied by a prospectus to protect the public from being swindled, and his advice to the public to be wary when subscribing for shares.
Encik Zulkifli said that during the last share market boom in 1973 there had been cases of shares of bogus companies being sold. This time, however, there are companies which had been registered under the companies Act 1965 with $2 or $3 paid-up capital fraudulently and illegally inviting and collecting $30 to $50 million as shares subscriptions.
I hope that the examples I cited to the Registrar when I met him last Thursday, and the documentary evidence I furnished him, would result in firm action on the part of Registry of Companies to protect the investing public, who had been led to believe that investing $1,000 today would produce $9,000 or $10,000 in a few months’ time.
I am not against the people buying shares and holdings shares, but they must be protected against those who want to mislead and swindle them. For instance, to establish a company with $2 or $3 paid-up capital, and illegally, without prospectus, inviting and collecting $30 or $50 million from the public is already an act of cheating.
Secondly, the public must be helped to discern and judge whether a particular investment is sound or not. the public must not be mistaken into believing that so long as they buy holdings shares, regardless of what type of holdings shares, they are sure to make ten-fold. If this is true, then all the MCA leaders at national, state and branch levels would sell, mortgage and pawn all their properties and assets to dump them into holdings shares – and the ordinary public would have no chance whatsoever.
In fact, if holdings shares could miraculously multiply ten-fold, then all the MCA national, state and branch leaders could stop all their businesses and just invest all their monies I the holdings shares. Why are they not doing so?
In Malaysia, as in all countries of the world, every share market boom has always been followed by a market collapse, as happened in Malaysia in 1973, causing so many bankruptcies and even suicides.
in fact, many analysis of the share market are of the view that a share market collapse ids not far off, and should they be right, and the ordinary people in the towns, new village in the country had put in their hard-earned money into the shares market, then there is going to be a lot of human tragedy in the country.
This is why the companies Act 1965 is passed to protect the public from those who wish to mulct the public of their hard-earned money when their companies are just an empty $2 or $3 shell. For their own interest, I would call on all purchases of holdings shares who had bought on the basis of share application forms without a prospectus to report to the Registrar of Companies or to any DAP official, or the DAP Headquarters, no.77 Jalan 20/9, Petaling Jaya, Tel:769554, to protect their investment.