A Delima case is about an enterprise founded by family members and later incorporated as Delima Sdn Bhd. The company principle is trading and supplying related products including manpower supplies to the oil and gas industries. The shareholders are En Zayed and Pn Hashimah which is husband and wife and the top organization of the company holds by their family members. Problem arise in year 2006 when they decided to take up loan from bank and realized that their company financial was not audited for several years and the bank requires audited financial statement to be issued before September 2006. However, their appointed Auditor Aziz & Co expressed their intention to qualify ...view middle of the document...
His action has brought to the breach of his fiduciary duty to exercise power in a good faith and in the best interest of the Company.
Besides, there are several withdrawals of money which are for personal purposes, unrecorded or were made without proper documentation. As stated in Section 132(2) of Companies Act 1965, a director cannot simply use company’s property as a director and the company is two separate legal entities. Therefore, the En Zayed and Puan Hashimah has breach the Director’s duties because they made personal cash withdrawal from the company and also charged their personal expenses to the company. If the unrecorded cash withdrawal were made not for company’s purposes, the Directors has breach their duties to act for the proper purpose and that the management of the company are making inappropriate activity.
Other than that, Section 132(1A) of Companies Act 1965 state that a Director should expected to have knowledges, skills and experiences. Encik Zayed and Puan Hashimah as the Director were not familiar with the Accounting Standards and Provision of the Companies Act 1965 including the duties and roles as a Company Director. Therefore they are unable to act for the best interest of the company.
Who should be held responsible and accountable?
In this case, not only the Directors of the Company who should be held responsible but also all level of management as each there are several faults found in each level of management not to mention the Director’s.
As the head of the Company, the Directors are the most responsible as the management are lead by them. En Zayed and Puan Hashimah are not fully occupied with the duties of the Director which every Director are expected to. As their acts and decision making were without this expected value, they are regard as not acting for the best interest of the company.
As for account department, during Puan Hashimah hold the account department, lots of errors were found because Puan Hashimah did not have the proper understading of how to handle the company accounts and the proper procedures. With the absent of proper procedures, wrong transactions has been made and there are a lot of missing documents.
Another person should responsible are human resource and administration manager and operation manager. For this case, Encik Salam was hired as human resource and administration manager who are responsible to prepare wages include EPF and SOCSO based on monthly basis. As HR manager, he should send employee to training and also hire correct...