in the court of appeal malaysia (appellate jurisdiction)

Ms Kat Yong also highlighted the finance costs of RM450,260
charged by NKC being interests on outstanding amount due to
NKC. She informed the Board that she has instructed the
Management to prepare a breakdown of the finance costs.
Mr. Chou Shui-chih (Mr. Chou) queried on the following:
(i) What is the portion of NKC’s facilities being used by the
Company.
(ii) Whether there is any formal loan agreement between
NKC and the Company?
(iii) What is the interest rate charged on the finance from
NKC?
(iv) Why is the board’s approval on the above not sought?
Tan Sri Lau remarked that transactions involving finance and
interest chargeable should be subject to the Boards’ approval.
He pointed out that clause 4.4.2 of the Joint Venture Agreement
provides that advances by the joint venture partners, are subject
to the prevailing banking interest rate for overdraft
facilities/term loan facilities to be agreed between the
shareholders. He added that exceptional items such as the
aforesaid finance costs charged by NKC should be verified and
confirmed by the Company’s auditors and that the
Shareholders’ approval should be obtained in accordance with
the Joint Venture Agreement.
Mr. Kung requested for the management report on the floor
plan counters performance to be extended to him for his perusal
and comments. In response, Ms Kat Yong instructed Mr. Liew
to provide the requested information to Mr. Kung.
Mr. Liew reported that as of 25 September 2003, the total actual
sales for September is RM2.2.million and the Management
is targeting at RM3.0 million sales by end of September 2003.
He added that the staff sets sales target for year 2003 at RM43
million but the HQ has increased the target to RM46 million.
He also reported that due to tight cash flow, the Company has
been delaying payments to suppliers and hence faced difficulty
69