Nila Furniture & Co (‘Nila’) is a partnership business which supplies office furniture. Recently, Suria Bhd (‘Suria’) entered into a contract with Nila for the purchase of office furniture valued at RM9,000. The decision to award the contract to Nila was made three weeks ago at a meeting of the full board of directors of Suria. One of the directors of Suria, Chandran, is also a partner of Nila. Chandran did not disclose this fact to Suria, or its board. A further fact was that although Chandran was present at the board meeting, at which the decision to award the contract to Nila was made, he
remained silent throughout the meeting and did not vote on the matter. Yesterday, Suria discovered that Chandran is a partner of Nila. It seeks your advice as to whether it may avoid the contract with Nila.
Advise Suria Bhd.