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account. Due to this, the third and fourth defendants were held to be liable under
the section.
10.6.2.2 Carrying on of any Business
To determine whether the company is carrying on the business within the
meaning of section 304(1), the court in LMW Electronics Pte Ltd v Ang Chuang
Juay & Ors 283 , refers to several English cases 284 and concludes that the phrase
means to include a myriad of activities and transactions undertaken by a company
which did not necessarily involve trading. The liberal interpretation of the phrase
was also seen in a Singapore case of Rahj Kamal bin Abdullah v PP 285 where the
director was convicted for fraudulent trading when the company he controlled
engaged in a pyramid selling type of investment scheme.
The usage of the words „any business‟ in the section results in a wide
interpretation being applied to as opposed to insolvent trading which is limited to
only the activity of incurring of debts. This results in more activities of directors
which can be subjected to personal liability which creates uncertainty and
difficulty for them in organizing their activities.
In Siow Yoon Keong v H Rosen Engineering BV 286 the court had no difficulty in
deciding that the passing of a resolution to ratify the uses of the company‟s funds
for the purpose of investments, and the sum of RM423,000 which was to be paid
to the respondent were used to pay the appellant‟s losses, constitute the carrying
on of the business within section 304(1).
283 [2010] 1 MLJ 185 at 199.
284 Reference were made by the High Court to R v Grantham [1984] 3 All ER 166; Re Augustus
Barnett & Son Ltd [1986] BCLC 170; Re Sarflax Ltd [1979] 1 Ch 592 and Re FP & CH
Matthews Ltd [1982] 1 All ER 338.
285 [1998] 1 SLR 447.
286 [2003] 4 MLJ 569 at 580.
298