QUESTION 1 (9 MARKS)

Tan, who is a non-executive director of Awan Dinamik Bhd. (ADB), sold all of his ADB shares when he discovered that ADB was in financial difficulty due to the Covid-19 pandemic. Tan came to know about ADB'S financial problem when he attended the company's board of directors meeting. A few days after Tan sold his ADB shares, the company made a disclosure of its financial situation to Bursa Malaysia. As a result, the price of ADB's shares listed on Bursa Malaysia plummeted due to panic selling by investors. Many investors suffered heavy losses, but Tan was able to avoid any loss since he had sold his ADB shares before the share price dropped abruptly [Issue 1].

Meanwhile, ADB has applied for an order from the court to convene a meeting to discuss a scheme of arrangement with its creditors who wanted to take legal action against the company [Issue 2]. At the same time, Chee who holds a one per cent share in ADB plans to take a legal action against all the directors of ADB. Chee plans to argue that several of his proposals presented during the company's annual general meeting were ignored by the ADB's directors and it resulted in the company having financial difficulties [Issue 3].

Based on the above situations, elaborate:

[Issue 1] supported by one (1) provision of the Companies Act 2016;

(2.5 marks)

[Issue 2] supported by two (2) provisions of the Companies Act 2016;

(4 marks)

[Issue 3] supported by one (1) case authority.

QUESTION 2 (7 MARKS)

Five months ago, Alpha Beta Sdn. Bhd. (ABSB) entered into a contract with Nandy, who is one of the directors of Larut Senja Sdn. Bhd. (LSSB), to supply five high-capacity cutting machines worth RM100,000. Now, ABSB wishes to apply for an order from the court to wind up LSSB for failure to pay the RM100,000 despite its demand for payment over the past two months [Issue 1]. However, ABSB is worried that its application will not be successful since the supply contract was signed by Nandy, who is an undischarged bankrupt. ABSB had only found out about Nandy's status after the machines were supplied to LSSB [Issue 2].

Based on the above situations, elaborate:

[Issue 1] supported by two (2) provisions of the Companies Act 2016; and

(3 marks)

[Issue 2] supported by two (2) provisions of the Companies Act 2016.