law485 question 1

QUESTION 1 Ah Yam, Ee Teck and Ang Sa owned several estates. In January 2019 they sold all the timbers in the estates to a company called Unggas Son Bhd, where all three of them became the only shareholders and directors of the company. Ah Yam had insured the timbers that he sold to the company in his own name. After that, a fire broke out destroying the timbers. When Ah Yam claimed, the insurance company refused to pay. In order to raise cash for the company, Ang Sa entered into a contract to sell his land to Nuri for RM 1 million. After some time, Ang Sa changed his mind and decided not to sell his land to Nuri. He then transferred ownership of the land to Unggas Sdn Bhd. In March 2019, the company suffered losses and in order to overcome financial difficulties, Ee Teck borrowed RM2 million from Bank Elang. Ee Teck knew that the company has no reasonable or probable ground of expectation to pay the debts. Advise all the parties about their liabilities in the above transactions. (30 marks)