Question
Rith Sdn Bhd is a company involved in producing various drugs. Its registered office is located in Selangor, with branch offices in Penang and Malacca.
Rith Sdn Bhd is a company involved in producing various drugs. Its registered office is located in Selangor, with branch offices in Penang and Malacca. The company is performing well due to the increased demand for drugs, due to the recent pandemic. The company's issued share capital totals 100,000, consisting of 65,000 ordinary shares and 35,000 preference shares. The 65,000 ordinary shares are evenly distributed among 9 shareholders.
During a recent Board of Directors (BOD) meeting, it was decided to reduce the dividend rate for preference shareholders from 9% to 6%. As a result, Rith Sdn Bhd scheduled a meeting to seek approval from the preference shareholders. The company has three preference shareholders: Rachel, Alice, and Jane. However, only two of them attended the meeting, representing a total of 9,000 shares. Jane, the third preference shareholder, did not attend the meeting because she did not receive the notice in person or by post. Jane claims that, as a major shareholder, she was not given proper respect. Rith Sdn Bhd had sent the notice via WhatsApp and made an announcement on its website, but Jane asserts that she rarely checks WhatsApp. The meeting took place in Malacca, as the BOD also held their board meeting there. Jane argues that even if she had received the notice, she would not have been able to attend because she resides in Penang.
On a separate issue, Nick, an ordinary shareholder of Rith Sdn Bhd, believes that the company has not obtained proper legal authorization to produce drones. He wishes to inform the other shareholders of the company about this concern and wants Rith Sdn Bhd to provide documentation proving the legality of their drone production. However, the BOD contends that Nick is acting out of revenge because he was not appointed as a director, despite being a major shareholder. Dissatisfied, Nick plans to escalate the matter.
Advise the BOD of Rith Sdn Bhd on the legal issues that may arise, referring to the Companies Act 2016 (Malaysia), using the following format: Identification of Issue, Explanation of Law, Application of Law, and Concluding Advice.Answer this question based on Company Act 2016 (Malaysia). Use this format (Identification of Issue, Explanation of Law, Application of Law, Concluding Advice) to answer this question.
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