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Products
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Government
Regulations
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| Events
Leading to Regulations |
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Proper
legislation on the timeshare industry came into light in 1993 shortly
after a company went bust after collecting money from 33,000 members. A
couple of years before that, timeshare schemes caught on at such a pace
that in June 1992, the then Registrar of Companies (ROC) put a freeze on
applications for the setting up of timeshare ventures. The freeze was
nevertheless lifted in July the same year.
Section 84 of the Companies
Act was amended and came into force in September 1992 so that the sale of
shares in timesharing holiday resorts is regarded as a sale of interests
to the public. A definition of timesharing was also included. In the same
month, the ROC issued two sets of policy guidelines and requirements of
timesharing arrangements is that only a public company can make public
offerings of interests. |
| Government
Regulations |
It
was regulated that the paid-up capital of the developer must not be less
than RM1 million in accordance with the Securities Industry Act 1983.
Furthermore, a sinking fund has to be established to cover periodic
repairs and replacement. Also, the proposed issue or sale to the public of
timeshare interests must be approved by the Capital Issues Committee as
they are deemed to be securities. |
There
has to be a mandatory cooling-off period disclosed in the prospectus where
the purchaser can cancel his membership. To safeguard the interests of the
purchaser, the number of timesharing holders should correspond to the
number of units in the project. The list of facilities and amenities
provided must be clearly stated in the prospectus.
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| Role of
Trustee |
Under
the regulations, each timeshare company must have a trust deed and a
trustee to act on the interest of holders, such as ensuring no
misappropriation of profit of revenue. Any complaints from holders can
also be directed to the trustee. The trustee is a licensed committee made
up of timeshare members themselves. Members are appointed on a quarterly
basis during an Annual General Meeting.
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| Role
and Objectives of MHTDF |
MHTDF
was registered in March 1993 to ensure self regulation among members.
The objectives of the federation includes promoting honorable and proper
conduct in the business of timesharing. The federation also represents
member companies in all
dealings with the Government, other trade association, the
media and the public. Other roles include assisting the authorities in
regulations pertaining to the
industry and the dissemination of information on new
regulations.
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| As
published in the Travel Times, New Straits Times on 27 September 2002 based
on column contributed by Emmeline Yong, former Managing Director of Leisure
Holidays Berhad |
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