Q1

Travelmania Sdn. Bhd. (TMSB) is a travel company established in 2013. It has two directors who are also members of the company, namely Adam and Adib. The company's business was running smoothly, but experienced financial problems in 2020 due to the Covid-19 pandemic. Adam declared dividends for 2020 on behalf of the company although the company did not earn any profit that could be legally used for dividend payments. Meanwhile, Adib took a RM300,000 loan from Dato' Karmin although at that time he knew that the company would not be able to repay it. Can Adam and Adib be held accountable for each of their action? Elaborate your answer generally without having to discuss any statutory provision or case authority.

QUESTION 2 (6 MARKS)

a. On 13/1/2021, Santesh expressed his agreement to buy a warehouse belonging to Sugu for RM300,000. The sale and purchase agreement between them provided that the warehouse was purchased on behalf of QuickBrick Sdn. Bhd. (QBSB) which was in the process of being incorporated. The agreement also provided that once the company is incorporated, the company would pay the price of the warehouse to Sugu. However, after being incorporated on 5/2/2021, QBSB refused to do so on the ground that it did not agree to the purchase of the warehouse as its location was not strategic. Advise Sugu of the claim he could make based on one (1) statutory provision. You do not have to discuss any case authority. (4 marks) b. Explain the legal principle highlighted in the case of Raffles Hotel Ltd. vs. Malayan Banking Bhd. (1966) 1 MLJ 206.

QUESTION 3 (5 MARKS) EliteAge Berhad (EAB) raises its capital through the issuance of shares and debentures. When EAB invites the public to buy several types of its shares, Cheng plans to buy shares that would give him the right to control the company's policy. Meanwhile on 9/3/2021, EAB registered a floating charge on its 12-storey building. The charge has a restriction, which provides that any charge subsequently created on the same asset will not have priority. On 6/6/2021, EAB registered a fixed charge on the same building and the chargee was aware of the restriction that existed. Based on the above situations, answer the following questions:

a. What type of shares should Cheng buy? State one (1) more right that the shares give to its holder based on one (1) statutory provision. (2 marks) b. The charge dated which date gives its holder the priority over the loan repayment if EAB is wound up? Explain your reason based on the relevant legal principle. (3 marks)