Downhill Sdn Bhd (the company) has gone into insolvent liquidation. Its liabilities far exceed its assets.You are required to advise the liquidator in respect of each of the situations below:(i) The company had been formed in 2005 with three members, Abu, Baloo and Chong. Nazeem was appointed as the manager of the company. In January 2006 Baloo transferred his shares to Abu and left the company. In January 2008 Chong’s shares were registered in Abu’s name when he surrendered his shares and migrated to Canada. Since then the company had continued to operate with Abu as the sole member under the management of Nazeem even though the company incurred heavy debts.Required:Advise the liquidator whether Abu could be held personally liable for all or any part of the debts of the company. (3 marks)(ii) In September 2008, Nazeem issued a cheque on behalf of the company in favour of Samy, a supplier of goods, as payment for goods sold to the company. Unfortunately, the name of the company was not correctly stated on the cheque and the bank has refused to honour it.Required:Advise the liquidator whether Nazeem could be made personally liable for the amount owed to Samy. (3 marks)
