Outworld Retail Sdn. Bhd. (Outworld Retail) is a branch of a large shopping mall in Malaysia. It maintains its corporate bank account with Sheeva Bank. Jade is the chief executive of Outworld Retail and she is also a major shareholder who authorised to issue cheques on behalf of the company. Jade empowered the finance manager, Shang Song, to manage financial activities of the company without knowing that he is a questionable individual due to his records of malpractice and fraudulent activities in his previous ventures. Although Outworld Retail has recorded high revenue in recent years, but the company has still operated a net loss due to unknown reasons. It was discovered that the company does not have a proper monitoring system in place to ensure cheques are issued properly. The authority to issue cheques lies within Shang Song's department. Over the course of 5 years, Shang Song had issued 540 cheques worth a total of RM 7,000,000 to his personal bank account, with the intention to abscond the fund. Jade does not conduct any checks on the company cheque books and she was unaware about these transactions. Upon a spot audit conducted by the holding company, Shang Song absconded and this issue surfaced. The company has now instituted a legal action against Sheeva Bank for conversion in order to recover the missing funds.

a) Shang Song maintained his account with Tarkat Bank, which assisted Shang Song to cash the 540 corporate cheques issued over the course of last five years. With reference to decided case laws, advise Tarkat Bank on whether it would be liable for Shang Song's fraudulent activities.