What are the specific Companies Act 2016 sections breached by TH Properties?

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TH Properties Breached Specific Sections of the Companies Act 2016

TH Properties Sdn Bhd contravened Sections 230(2), (3), and (4) of the Companies Act 2016 (Act 777). These specific provisions govern the approval processes for directors' fees and benefits within companies. The breaches, identified in a report concerning Tabung Haji, relate to the improper payment of bonuses without adhering to the stipulated legal procedures.
Directors' Fees and Benefits Approval for Private Companies

For private companies such as TH Properties, Section 230(2) of the Companies Act 2016 outlines that the Board of Directors possesses the authority to approve directors' fees and any associated benefits, provided this is in accordance with the company's constitution. This delegation of approval power is a key distinction from public companies, where general meeting approval is mandated.
Procedural Requirements for Approvals

Following any such approval by the Board of Directors, Section 230(3) mandates that these decisions must be formally recorded in the minutes of the directors' meeting. Furthermore, the company is required to notify its shareholders of these approved fees and benefits within a period of 14 days from the date of the approval. The report indicated that these procedural steps were not followed by TH Properties.
Shareholder Rights and Recourse

Section 230(4) provides recourse for shareholders holding a significant stake, specifically those with at least 10% of the total voting rights. If these shareholders deem a payment to be unfair to the company, they have the right to demand that the company pass a resolution to approve the payment, either through a written resolution or at a general meeting. This right must be exercised within 30 days of becoming aware of the payment. Failure to obtain the necessary approval through these mechanisms means the payment becomes a debt owed by the director to the company, as stipulated in Section 230(5).

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What are the specific Companies Act 2016 sections breached by TH Properties?

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