Roogi Bhd was incorporated in 1999. The company has sulfered

revenue losses exceeding RM10 million over the last three years.

However, its subsidiary, Kaya Bh, has made substantial profits last

year. Kaya Bd has not distributed these profits as dividends to its

own members. Cermat, the managing director of Roogi Bhd,

seeks your advice on the following matters:

whether Roogi Bid can utilise the profits of its subsidiary; Kaya

Bhd, to pay dividends to its (Roogi Bhd's) members;

the legal position under the Companies Act 2016, if it is

discovered that Roogi Bhd has paid a cash dividend out of

capital.