Brookes Sdn. Bhd. (the Company") is a car manufacturer in Shah Alam. It also provides hire purchase of equipment to some of its customers. The Company consists of James, the director of the Company, holding 40% shares of the Company; Mary, the wife of James who is also the director and shareholder of the Company with 30 % shareholding and Mann, the shareholder of the Company with 30% in ratio. The Company owns 2 pieces of land with 3-storey buildings erected thereon identified as No. 2 & No. 4 Jalan Car, 50000 Shah Alam, Selangor. The property identified as No. 2 is charged to HSBC (M) Berhad ("the Bank) for a loan of RM 5,000,000.00 whereas the property identified as No. 4 is free from charges. In March 2020, the Bank extended RM 100,000.00 finance to the Company and took a charge under which the Company purported to charge the benefit of certain hire purchase agreements in favour of the Bank In April 2020. James came to be aware that the accounting and other records do not sufficiently explain the transactions and financial position of the Company, however, he did not draw to the attention of the Company in its general meeting. In September 2020, the Company was facing a significant deficit in their account, and the Company signed a sale and purchase agreement with Joe, James's eldest son and sold the property identified as No. 4 at a price which was significantly below the market price. The transaction was later ratified at a shareholders' meeting. In December 2020, the Company went into liquidation. (6) If you were the director of the Company, what are the appropriate steps to prevent abuse of power of a director? (10 marks) Brookes Sdn. Bhd. (the Company") is a car manufacturer in Shah Alam. It also provides hire purchase of equipment to some of its customers. The Company consists of James, the director of the Company, holding 40% shares of the Company; Mary, the wife of James who is also the director and shareholder of the Company with 30 % shareholding and Mann, the shareholder of the Company with 30% in ratio. The Company owns 2 pieces of land with 3-storey buildings erected thereon identified as No. 2 & No. 4 Jalan Car, 50000 Shah Alam, Selangor. The property identified as No. 2 is charged to HSBC (M) Berhad ("the Bank) for a loan of RM 5,000,000.00 whereas the property identified as No. 4 is free from charges. In March 2020, the Bank extended RM 100,000.00 finance to the Company and took a charge under which the Company purported to charge the benefit of certain hire purchase agreements in favour of the Bank In April 2020. James came to be aware that the accounting and other records do not sufficiently explain the transactions and financial position of the Company, however, he did not draw to the attention of the Company in its general meeting. In September 2020, the Company was facing a significant deficit in their account, and the Company signed a sale and purchase agreement with Joe, James's eldest son and sold the property identified as No. 4 at a price which was significantly below the market price. The transaction was later ratified at a shareholders' meeting. In December 2020, the Company went into liquidation. (6) If you were the director of the Company, what are the appropriate steps to prevent abuse of power of a director? (10 marks)
