[25] From the minutes and the correspondence tendered as exhibits, it is clear that the 2nd respondent had been threatened by the bank in respect of the banking facilities already given to the Company. The Board was also informed that the HSBC was willing to continue the banking facilities on condition that the 2nd respondent and the petitioner provide additional security. As can be seen the 2nd respondent was willing to provide the additional security and also agreed on the request by the petitioner to indemnify the petitioner in respect of the petitioner's share of additional security and yet the petitioner was not ready to give the undertaking, on the excuse that the Chairman on behalf of the petitioner had to refer the matter to its headquarters in Taiwan. It is clear to us that the petitioner was not willing to take any risk but to enjoy all the benefits under the JV.

[26] Further down the minutes in Agenda 7 and Agenda 8 it state as follows:

AGENDA 7

AMOUNT OWING TO/FROM RELATED COMPANIES:

Ms Kat Yong briefed the Board on the amount due from related companies of which the breakdown analysis is presented in Appendix 6 of the Board Paper.

The Board noted this information and will decide on the treatment of this accounts after the Management has verified these accounts together with the Auditors and report to the Board.

AGENDA 8

ADVANCES FROM NGIU KEE GROUP

The Board noted this information that as at 31 May 2003 the Ngiu Kie Group has advanced RM3.78 million to the Company for the repayment to its suppliers.

[27] At the Board of Directors' Meeting the minutes of the meeting shows the following:

Agenda 4 BANKING FACILITIES WITH HSBC BANK MALAYSIA BERHAD, KOTA KINABALU (HSBC)

Ms Kat Yong reported that HSBC has reduced the Company's banking facilities from RM6 million to RM3.12 million. Tan Sri Lau also helped by granting his personal guarantee for RM1 million as additional security for the HSBC facilities. Furthermore, HSBC requires the Company to make full settlement by 29 February 2004.

Datuk Chairman, on behalf of the Board, recorded a note of thanks to Tan Sri Lau for granting his personal guarantee and endorsed his generosity.

Tan Sri Lau expressed his concern over the Company's cash requirement of approximately RM6 million, and finding ways to resolve the cash requirements whilst the Company's profit level in not there.

Mr. Kung commented that unless the Company improves on its profitability, he is doubtful on the ability of the Company to continue surviving.

Ms Kat Yong reported that the Company shall continue to source for banking facilities from other banks. She added that barring unforeseen circumstances NKC's right issue should be completed by January/February 2004. By then, NKC would be in a position to assist the Company financially.

...

Agenda 6 MONTHLY MANAGEMENT ACCOUNTS AND BUDGET FOR SEPTEMBER TO DECEMBER 2003

The Board noted that the monthly management accounts have not been submitted to the Board Members regularly and in time for the management committee meeting.

Tan Sri Lau commented that the monthly management accounts and Board Papers should be distributed to the Board Members well in advance to enable them to consider the subject matter in advance.

At this juncture, Mr. Louis Phung (Mr. Louis), the Accountant, was invited into the Meeting Room.

Ms Kat Yong briefed the Board on the Budget for September to December 2003. She reported that the Company's performance to date is better than last year and quite close to the management budget.

Ms Kat Yong also highlighted the finance costs of RM450,260 charged by NKC being interests on outstanding amount due to NKC. She informed the Board that she has instructed the Management to prepare a breakdown of the finance costs.

Mr. Cui-chih (Mr. Chou) queried on the following:

(i) What is the portion of NKC's facilities being used by the Company.

(ii) Whether there is any formal loan agreement between NKC and the Company?

(iii) What is the interest rate charged on th