Question
Neave Sdn Bhd is a company that produces all types of webcams and drones. Its registered office is in Kuala Lumpur. It also has branch
Neave Sdn Bhd is a company that produces all types of webcams and drones. Its registered office is in Kuala Lumpur. It also has branch offices at Penang and Malacca. Their business is doing well since there is a high demand for webcams in view of online meetings and discussions by various business organisations. Neave Sdn Bhd's issued share capital is 100,000, whereby 70,000 is made up of ordinary shares and 30,000 is made up of preference shares. The ordinary shares are held equally by 7 shareholders. At a recent Board of Directors' (BOD) meeting, it was decided that the rate of dividends for preference shareholders will be reduced from 8% to 4%. Hence, Neave Sdn Bhd called for a meeting to seek approval from its preference shareholders. There are 3 preference shareholders in the company, namely Naim, Ah Ning and Nanda, but the meeting was only attended by two shareholders. Together their preference shares amounted to 9,000 shares. The third preference shareholder, who is Naim, did not attend the meeting since the notice was not sent to him in person or by post. He claims that as a shareholder holding a huge number of shares, due respect has not been given to him. Neave Sdn Bhd notice was sent via Whats App and the company's website announced about the meeting. Naim claims that he hardly looks at Whats App messages. The meeting was held at Malacca since the BOD also had their BOD meeting at Malacca. Naim claims that even if he has received the notice, he could not have attended the meeting as he lives in Penang. On another note, Nelson, who is an ordinary shareholder of Neave Sdn Bhd, is of the 14 opinion that the company did not obtain proper legal approval to produce drones. He wants all other shareholders of the company to know about this matter as well. He wants Neave Sdn Bhd to show proper documents to prove the legality of the matter. However, the BOD claims that Nelson is just taking revenge as he was hoping that he will be appointed as a director of the company since he was a major shareholder holding. Nelson, who is dissatisfied, wants to take up the matter to a higher level. Advise the BOD of Neave Sdn Bhd on the legal issues that may arise. Answer this question based on Company Act 2016 (Malaysia). Use this format (Identification of Issue, Explanation of Law, Application of Law, Concluding Advice) to answer this question.
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