Former chief executive officers, vice-presidents and former directors can be subject to individual suits by their companies, if they are found to be negligent and breach their fiduciary duties.

NONE Bar Council vice-chairperson Lim Chee Wee ( right ) said directors owe a duty to a company where they are directors to act honestly, with reasonable care and diligence.

“In the event that any director falls short of this standard of care, they are liable to be sued in their personal capacity and if found to be negligent, will also be liable to loss and damage suffered by the company as a direct result of the breach,” he said.

Lim, who possesses an LLB and Bachelor of Commerce (Accounting) qualification from Australia, was asked to comment on the two suits filed by Sime Darby against its former chief executive officer Ahmad Zubir Murshid and other former senior executives of the company who were named in their individual capacity.

He was also asked on whether the suit may have an impact on disrupting on-going investigations into the firm’s reported RM1 billion losses, Lim said civil and criminal proceedings may run concurrently.

“These are proceedings of a different nature and standard. Look at the proceedings involving the Port Klang Free Trade Zone as an example,” he said.

“When a director is sued, there is no distinction between personal or general capacities of directors,” he said.

PKFZ losses had also seen suits filed by the Port Klang Authority and also criminal action taken against turnkey operator Kuala Dimensi Sdn Bhd senior executives.

Lim, who is a partner in the Skrine law firm, was also asked on questions plaguing some of Malaysiakini's readers over why the whole board of directors was not sued, and he said not all directors are sued because some may have objected to the transaction or they did not know about it.

“Some may not have known even if they exercised reasonable effort to find out,” he said.

Burden or threshold high

Another corporate lawyer Mathew Thomas Philip also agreed with Lim as the chief executive officer and others can be liable individually if they violated their fiduciary duties.

“They are liable for individual actions if they breach their fiduciary

duties to look after the interests of the company, hence they should be held responsible for their actions and they can be sued,” said Philip.

Mathew Thomas Philip Philip ( right ), who is the founder of law firm Thomas Philip Advocates &

Solicitors said the burden or threshold to prove this in court would be high.

“The company must be able to prove that the individuals named through their individual actions are truly responsible in resulting the losses,” he said.

Asked as to whether some view the legal suits against the said

individuals are seen to make them as scapegoats for the losses, Philip said people are entitled to that notion but the fact remains that when one assumes a high position, one must be responsible for the actions taken.

In this case, he said the company suffered huge losses which must be accounted for.

The question as to whether the said individuals should account for those heavy losses, Philip said, would be the question to be determined in the legal suits.

NONE Yesterday Sime Darby named its former chief executive officer Ahmad Zubir ( left ) and four others in a RM332 million lawsuit following the RM2.1 billion losses suffered by the conglomerate.

Four others being sued are former executive vice-president of the Energy and Utilities division Mohamad Shukri Baharom, the division's chief financial officer Abdul Rahim Ismail, the division's oil and gas unit chief Abdul Kadir Alias and Mohd Zaki Othman from Sime Engineering.

Today Sime Darby slapped another RM92.2 million lawsuit against Zubir, Shukri and Rahim following losses suffered in the Bakun Dam project.