Charge/assignment over the Mudharabah Account. Any comment?

Question

I've been asked to review the banking facilities offered by AmBank Ltd of RM 5million, our company is EMP private Limited
Nature of Financing: Ijarah – Leasing
Tenure: Up to 15 years with initial grace period of up to 6 months after value date.
Security: By way of the following:-
1.Debenture over company’s fixed and floating, current and future assets.
2.2nd party first registered charge over the “ConMewah” land
3.Corporate guarantee from Masee Ltd
4.Registered charge over all ordinary shares issued by EMP
5.An irrevocable & unconditional standing instruction to credit all sales proceeds into the EMP Mudharabah Account.
6.Charge/assignment over the EMP Mudharabah Account
7.Any other security documents as advised by AmBANK’s solicitors
Governing Laws: Laws of Malaysia

An irrevocable & unconditional standing instruction to credit all sales proceeds into the EMP Mudharabah Account. How these effect us?
Charge/assignment over the EMP Mudharabah Account. Any comment?

Answer 1

I'm not familiar with the laws of Malaysia, but it looks like your co. has a Mudharabah current account. What your co. has done is agree to bank all proceeds from sales into this a/c and the AMbank Ltd has a charge on this a/c. That means you can deposit monies into this a/c but you cannot make payments from this a/c unless you've written permission from AmBank. This way they can monitor how liquid you are, how much cash you have.