Jamal, Jong and Jacob are the directors of Kosain Bhd (“Kosain”). The business of the company is to offer management and consultancy services. Each of the directors holds 10% of the company’s issued share capital. The remaining of the shares is held by Jesvin who is also the accountant of the company. Recently, the company decided to issue new shares to all its shareholders. In the light of the current financial crisis, the company set up an employee share scheme, offering a loan to all its employees to take up the shares: a. The Board of Directors, Jesvin and the employees were offered the loan to take up the shares of the company. However, Jesvin claims that the offer is in breach of the law. The Board of Directors seeks your advice. b. Recently “Kosain” contracted to buy a piece of land from Erica. The market value of the land is RM 350,000. However, “Kosain” bought the property at RM 500,000, which is above the market value. Two weeks later, Erica bought a huge number of shares in Kosain. Jesvin is unhappy over the matter. Jesvin claims that the company is in breach of the law. The Board of Directors seeks your

Answer rating: 100% (QA)

My advice to the Board of Directors of Kosain Bhd about the doubts raised by Jesvin about a possible breach of law are as below a Jesvin is right abou... View the full answer