QUESTION

Anjali and Rahul are directors and majority shareholders of Syarikat Permata Raya Sdn Bhd. The company deals with import and export of expensive gems throughout the world. The directors contracted with Salman Hindi Company from India for the purchase of various textiles. They were trying into new business for the company without notifying the other shareholders. Due to inexperience of the directors in textiles, Syarikat Permata Raya Sdn Bhd suffered heavy losses.

Tina, the auditor of the company found out that a lot of payment has been made irregularly by the directors to Salman Hindi Company. He did not enquire further and did not mentioned it in the auditors' report.

Rohan, a minority shareholder seeks your advice. Advise Rohan.

(20%)