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Ah Bong was the Director of Beta Bhd, a building company. The company had contracted to build a large city building and called for tenders

Ah Bong was the Director of Beta Bhd, a building company. The company had contracted to build a large city building and called for tenders for work proposed for subcontracting. Bob, a life time friend of Ah Bong, was a majority shareholder and a director of Bob's Plastering Sdn Bhd. The company had been going through bad times and urgently needed a big job. Bob offered Ah Bong RM5000 commission if he could arrange for the subcontract to go to his company. Ah Bong was also a shareholder of Beta Sdn Bhd which manufactured plaster sheeting and was the sole supplier to Bob's Plastering Sdn Bhd. Beta Sdn Bhd followed the habit of paying, in addition to ordinary dividends, a bonus to any shareholder who could demonstrate that he was successful in procuring substantial sales of its product. When all the tenders for plastering were submitted to Bob's Plastering Sdn Bhd was RM500 higher than the lowest tender. Ah Bong persuaded the board of Alpha Bhd to accept the tender. Bob duly paid Ah Bong the RM5000 and Beta Sdn Bhd paid him the sum of RM500 as a bonus for stimulating sales. Ah Bong banked these sums and later purchased shares in Preston Sdn Bhd a rival building company of which he became a director. During the course of construction, Alpha Bhd experienced financial difficulties and fell behind schedule. The building proprietor threatened to repudiate its contract with Alpha Bhd and tentatively approached Preston Sdn Bhd with a view of having that company complete the project. Ah Bong revealed to the board of Preston Sdn Bhd the various estimates, accounts and schedules of Alpha Bhd. Preston Sdn Bhd was thus able to persuade the building proprietor to take advantage of the situation to repudiate its contract by reason of Alpha Bhd's delay and to engage Preston Sdn Bhd. Preston Sdn Bhd made a large profit from the deal and as a gesture of appreciation gave Ah Bong RM20000 and a free trip to London. The shareholders of Alpha Bhd and the other directors have now come to know as to what Ah Bong has been up to. Alpha Bhd seeks your advice on the matters arising above.

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