Commentary On The Fiduciary Duty Aspects Based On The Decision Of The High Court For Bank Rakyat's RM15 Million Book Sponsorship Suit

• Published date: 06 March 2024
• Law Firm: Azmi & Associates
• Author: Heu Wen Yen, Nurliyana Ahmad Zaini and Jasmine Ngu Tzeh Zhen

Facts

The High Court recently reached a decision in a case involving the breach of fiduciary duties by two former top executives of Bank Kerjasama Rakyat Malaysia Berhad ("Bank Rakyat"), Tan Sri Abdul Aziz Zainal, the former Chairman, and Datuk Mustafha Abd Razak, the former Managing Director.

Both individuals were found to have failed in their duty to act in the best interests of Bank Rakyat. This verdict pertains to their involvement in sponsoring a book about Malaysia's former Prime Minister, Datuk Seri Najib Razak, in 2016.

The legal action was initiated by Bank Rakyat ("Plaintiff") against five defendants. The first two defendants were the former top executives of the Plaintiff, as introduced earlier. The third defendant, Zilerie Global Sdn Bhd, is the purported publisher of the book titled "Antara 2 Zaman Najib Tun Razak - Mendepani Cabaran dan Menggalas Sejuta Harapan".

The fourth defendant, Nor Alira Binti Ramli, is a lawyer who served as a stakeholder on behalf of the publisher in relation to the sponsorship of the book. Lastly, the fifth defendant, Muhammad Ghazali bin Abdul Majid, is a director of the third defendant.

In the course of events, the first defendant agreed to meet with the fifth defendant to discuss a proposal to sponsor the aforementioned book, with the intention of boosting the former Prime Minister's political image.

The second defendant was later summoned to join the meeting, during which the fifth defendant disclosed that the sponsorship amount could go as high as RM15 million.

The first defendant urged the second defendant to discreetly...