In addition, any new corporate proposals submitted to the SC by such companies must include proposals that would increase the paid-up capital to the minimum level. Proposals that do not address the issue of minimum capital size will not be considered.

Under-capitalised companies are also reminded to adhere to the deadline for compliance, which has already been extended from 30 April 2002 to 31 December 2002. The securities of listed companies that fail to meet the minimum paid-up capital requirement by the extended deadline will be subject to trading restrictions (full payment before purchase). These trading restrictions will only be uplifted when the said companies have fully complied with the minimum paid-up capital requirement.

The SC will also take other measures after the expiry of the extended deadline, such as suspension from trading, if these companies still fail to show serious and committed efforts to increase their paid-up capital to the required level.

The RM60 million and RM40 million paid-up capital requirement for the Main Board and the Second Board respectively was introduced by the SC in early 1999 to increase the free float and liquidity of shares of companies listed on the KLSE. Listed companies were originally given a time frame of three years until the end of April 2002 to comply with the minimum share-capital requirement. The Prime Minister recently announced in his Budget 2002 Speech that the deadline for companies listed on the Main Board and Second Board of the stock exchange to increase their paid-up capital to the minimum level has been extended from April 2002 to December 2002.

As at 13 November 2001, approximately 12% of the 516 companies listed on the Main Board and 57% of the 293 companies listed on the Second Board have yet to achieve the requisite minimum paid-up capital. The full list of these under-capitalised companies is provided in the Appendix.