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Delima Case Study

In: Business and Management

Submitted By mimiyhusin
Words 1132
Pages 5
Summary

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 their Financial Statement due to some unresolved issues. As En Zayed and Puan Hashimah need the audited Financial Statement as soon as possible, they tried negotiating with the Auditor to not qualify their Financial Statement but failed to do so which lead them planning to terminate the auditor’s appointment and appoint a new “friendly party” auditor. En Zayed also had assigned Cik Amy (Finance Executives), a new inexperienced employee to analyse and provide required clarifications and documentations to the Auditors.

Were there any abuses of power by the management and breach of fiduciary on the part of the director?
Yes, there are abuses of power by the management and breach fiduciary on the part of the director. Under Section 132(1) of the Companies Act 1965 state that a director of a company shall at all time exercise reasonable care, skill and diligence. Director who are appointed as an agent of a company have a fiduciary duties towards the company which include duty to act bona fide in the interest of the Company, duty to avoid conflict of interest and duty to act for the proper purpose with reasonable care, skill and diligence.

This case shows that Encik Zayed as the...

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