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)]