QUESTION 1

Cybernusa Sdn Bhd is a property development company with three directors namely Ali, Uno and Trez. At a recent board meeting, they came up with certain resolutions. Discuss the duty and liability of the respective directors pertaining to the following resolutions:

1. To purchase a plot of land from Alicia for RM160,000. The board has not been informed that Alicia is Ali's wife and that the land is only valued at RM80,000. (6 Marks)
2. To reject an offer made by Dr Aron to sell his 10 acres of land at a price of RM100,000 which is far below the market value. This is because the board were of the view that such location is not economically viable for commercial project after being informed by Uno. After the meeting, Uno approached Dr Aron to buy the land in his personal capacity as he has heard before this that the government if planning to build a university campus close to the area. (8 Marks)
3. To enter into a contract with Trez for the payment of pension to his family worth RM20,000 per month after his resignation. (6 Marks)

QUESTION 2

Jenny is one of the auditors at an establish accounting firm. Three years ago, she had audited the accounts of Ocho Sdn Bhd, a subsidiary company of Numerous Groups. During the audit, she discovered some irregularities with regard to the profit stated in the accounts. She sought explanation from the officer and was informed that the profit was overstated as the company was in the process of applying for a loan from BMC Bank to finance it's a new project. The officer also informed Jenny not to be too concerned with the figure as the accounts have already been approved by the top management of Numerous Groups. Jenny then made a report on the accounts and verified them as true and view.

Based upon the report, BMC Bank approved a loan to Ocho Sdn Bhd. Subsequently, the company went into liquidation. BMC Bank conducted an investigation and discovered that the accounts of Ocho Sdn Bhd were materially incorrect and false. Furthermore, there is a widespread rumour that Jenny is indebted to Numerous Groups for an amount of RM50,000. BMC is now initiating legal action against Jenny and her accounting firm for breach of auditor's duty. Decide whether BMC Bank would succeed in their legal action. (20 marks)

END OF QUESTION PAPER

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Suggested template

Question ____

(a)ISSUE ONE

1) Issue

State the issue here ...

1.Whether......?

2.Whether ...?

2) Law

Start your law content here ... a definition perhaps ...

Paragraph two... state the theory/ rule/ explanation about the issue...

Paragraph three.. state the section

Paragraph four ... explain case one

Paragraph five .. explain case two

Paragraph ...

3) Application

Apply the above law - rule and support with section and case(s) to the problem. Quote the relevant law/section/case only. You are acting as a lawyer to give advice about the problem in the question...

4) Conclusion

In short, what is your conclusion ....

(b)ISSUE TWO

1) Issue

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3.Whether......?

4.Whether ...?

2) Law

Start your law content here ... a definition perhaps ...

Paragraph two... state the theory/ rule/ explanation about the issue...

Paragraph three.. state the section

Paragraph four ... explain case one

Paragraph five .. explain case two

Paragraph ...

3) Application

Apply the above law - rule and support with section and case(s) to the problem. Quote the relevant law/section/case only. You are acting as a lawyer to give advice about the problem in the question...

4) Conclusion

In short, what is your conclusion ....

(c)ISSUE THREE (if relevant, please delete if it is not used)

1) Issue

State the issue here ...

5.Whether......?

6.Whether ...?

2) Law

Start your law content here ... a definition perhaps ...

Paragraph two... state the theory/ rule/ explanation about the issue...

Paragraph three.. state the section

Paragraph four ... explain case one

Paragraph five .. explain case two

Paragraph ...

3) Application

Apply the above law - rule and support with section and case(s) to the problem. Quote the relevant law/section/case only. You are acting as a lawyer to give advice about the problem in the question...

4) Conclusion

In short, what is your conclusion ....