Rainbow Sdn Bhd law and related cases

Rainbow Sdn. Bhd. (Rainbow) is a food manufacturing company with seven shareholders, of whom Zara, Adam, Michael and Muthusamy are the directors. The company has ventured into the bakery and coffee shop business and exported its products to other countries too. However, there has been a sharp drop in the company’s financial performance since the Movement Control Order was imposed, affecting the company’s operational status. The executive director, Zara, is concerned about the deteriorating state of the company. Upon scrutiny, the following irregularities have come to light.  In early 2020, the company entered into a contract with a supplier of organic wheat and chocolates called Saga Manufacturer. Unknown to the company, Saga Manufacturer is owned by Michael’s uncle. Michael receives a 0.1% bonus from his uncle for each delivery.

Muthusamy is sent to Kuala Lumpur to explore the possibility of getting a supplier for the butter and margarine. Without consulting Adam, Michael and Zara, he set up a meeting with the director of the Health OG Sdn Bhd, Jokowi, one of the well-known suppliers for the bakery business.  After their first meeting, he immediately agrees to sign a contract with the Health OG Sdn Bhd because he thinks the company can profit more when they sell the cakes and pastries. The price is a little bit higher than the company can afford. However, Muthusamy does not think this will be a problem because their company has a good marketing team, and his friend, Yasin. is also interested to get the supply of cake and pastries from Rainbow. Therefore, he expects that profits will recover immediately.

What are the issues here? The related law and related cases.