Question: Solid Cables Sdn Bhd (SC) was in financial difficulties. Soon Kit, the chief executive officer and director of SC, had arranged to sell a property

Solid Cables Sdn Bhd (SC) was in financial

Solid Cables Sdn Bhd (SC) was in financial difficulties. Soon Kit, the chief executive officer and director of SC, had arranged to sell a property to a company called Dreamwell Sdn. Bhd (Dreamwell) for RM500, 000. Soon Kit knew the property could raise at least RM700,000 on the market. One of Dreamwell's shareholder and director is Soon Kit's wife. The other two directors of SC, Lee and Woo, had approved the sale of the property to Dreamwell because Soon Kit had told them RM500, 000 was a good price to sell the property and raise the cash required to lessen SC's financial difficulties. They did not ask Soon Kit any questions regarding the sale. They also were not informed of Soon Kit's wife connection with Dreamwell. Based on the above scenario discuss whether the directors of Solid Cables Sdn Bhd have breached the following duties: a. Duty to act for the best interest of the company. (4 marks) b. Duty to avoid conflict of interest. (4 marks) C. Duty of care, skill and diligence. (4 marks)

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