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Q：
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What kind of interest requires a director to disclose?
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A：
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The Companies Act 2016 requires a director to disclose their interest in a contract or transaction with another company in which he has an interest, or if the interest is held by certain family members of his, such as his spouse, children, etc.
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Q：
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Why must a director disclose their interest in other companies?
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A：
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A director may hold multiple directorships and may encourage their companies to enter into contracts or transactions in which they have a personal interest. By disclosing directors’ interests, it may foster transparency in management, uphold integrity, and allow informed decisions about the contracts or transactions.
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Q：
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When should directors disclose their interests?
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A：
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At the earliest opportunity following the discovery of relevant information, the director must disclose any personal interest in commercial agreements or contracts upon recognising a potential conflict of interest.
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Q：
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To what extent is a director required to disclose his interests?
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A：
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Malaysian law requires directors to disclose material interests related to the company. Nonetheless, in ambiguous situations, it is always best to provide comprehensive and transparent disclosure. The disclosure shall include the nature and extent of interest, ensuring shareholders are fully informed of the actual situation.
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Q：
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What are the consequences if a director fails to disclose his interest?
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A：
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The director will be in breach his fiduciary and statutory duties to act in the company's best interests, making the contract voidable. Failure to disclose is an offense under the law, and directors may face fines, imprisonment, or both.
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FAQ
