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S.

132(1C) states that a director, in exercising his duties as a director


may rely on information, professional or expert advice, opinions,
reports or statements including financial statements and other
financial data, prepared, presented or made by (a) any officer of the
company whom the director believes on reasonable grounds to be
reliable and competent in relation to matters concerned; or (b) any
other person retained by the company as to matters involving skills
or expertise in relation to matters that the director believes on
reasonable grounds to be within the persons professional or expert
competence [Petra Perdana Berhad v Tengku Ibrahim Dato' Ibrahim
Petra bin Tengku Ibrahim Indra Petra & 6 Ors(2014)]. S.132(1D)
states that the directors reliance made under subsection (1C) is
deemed to be made on reasonable grounds if it was made (a) in
good faith and (b) after making an independent assessment of the
information having regard to the directors knowledge of the
company and the complexity of the structure and operation of the
company. S.132(1F) states that except as otherwise provided in CA
1965, memorandum or articles of association of the company or any
resolution of the board of directors or shareholders, directors may
delegate any power of the board of directors to any committee to
the board of directors, director, officer, employee, expert or any
person, directors are responsible for the exercise of such power of
the delegatee as if the power had been exercised by the directors
themselves. S.132(1G) states that directors are not responsible if:
(a) directors believed on reasonable grounds that delegatee would
exercise power in conformity with duties of directors and (b)
directors believed on reasonable grounds, in good faith and after
making inquiry if necessary, that the delegatee was reliable and
competent in relation to the power delegated [Re City Equitable
Fire]. S.132(2) states that a director or officer of a company shall
not, without the consent or ratification of a general meeting: (c) use
his position as such director or officer; or (d) use any opportunity of

the company which he became aware of, in the performance of his


functions as the director or officer of the company, to gain directly
or indirectly, a benefit for himself or any other person, or cause
detriment to the company.
S.67(1) prohibits a company from giving a person financial assistance, whether by
means of loan, guarantee or the provision of security, to acquire shares in the
company or in its holding company. This section prevents reduction of companys
assets not in the ordinary course of business which will reduce the assets available for
repayment of its debts. For example, in Datuk Tan Leng Teck v Sarjana Sdn Bhd,
the company sold land to third party and subsequently the third party holds the shares.
Court held that this was a financial assistance help the purchaser to become
shareholder thus breach of concept of financial assistance. In Belmont Finance Corp
Ltd v Williams Furniture Ltd, the case similar with the question which the company
purchased property from a person who intended to purchase its shares. The court held
found it was not in the companys own interest to enter into this transaction. This was
a breach of fiduciary duty and breach of the prohibition on financial assistance. In
Intraco Ltd v Multi-Pak Singapore Pte Ltd, the case stated that the transaction was
entered into bona fide in the commercial interest of the company. S.67(2) states that
nothing in subsection (1) shall prohibit: (a) where the lending of money is part of the
ordinary business of a company, the lending of money by the company in the ordinary
course of its business[Steen v Law (1964)]; or (b) financial assistance is given in
accordance with any scheme for the benefit of employees of the company or its
subsidiary company; or (c) financial assistance given to its employees, other than
directors, or that of its subsidiary to enable them to purchase shares in the company or
its holding company. The consequences of breach is also stated in s.67. S.67(3) states
that each officer in default is guilty of an offence. S.67(4) states that where a person is
convicted under s.67(3), court can order him to pay compensation to the company or
the person if they suffer any losses as a result of breach of s.67(1). S.67(5) states that
the power of a Court under section 354 to relieve a person to whom that section
applies, wholly or partly and on such terms as the Court thinks fit, from a liability
referred to in that section, extends to relieving a person against whom an order may be
made under subsection (4) from the liability to have such an order made against him.

S.67(6) states that company or any person can recover the loan made or any amount
for which it becomes liable due to financial assistance given in breach of s.67(1).
[Lori (M) Sdn Bhd v AMFB (1999)]