2017 MarsdenLR 1060

FEDERAL COURT PUTRAJAYA
DATO PREM KRISHNA SAHGAL – Appellant
Versus
MUNIANDY NADASAN & ORS – Respondent
[Civil Appeal No: 02(f)-53-08-2016(W)]

Section 304(1) of the Companies Act 1965 holds individuals personally liable if business is conducted with the intent to defraud creditors.

Headnote:Section 304 of the Companies Act 1965 addresses fraudulent trading, allowing courts to hold directors personally liable for debts if company business is conducted with intent to defraud creditors. The facts outlined establish that employees were creditors due to unpaid wages and statutory contributions. The court found intent to defraud as the appellant continued operations despite knowing there was no prospect of payment to employees. The final outcome affirmed the lower court's decisions declaring the appellant personally liable for the debts owed to the employees.