COVID-19 Crisis

COVID-19 continued to take its toll on the Malaysian economy in 2021.

On 12 November 2021, Bank Negara Malaysia (BNM) reported that Malaysia's economy contracted 4.5% year-on-year in the third quarter of 2021. This comes after a 5.6% contraction of Malaysia's GDP in 2020, which was the second worst contraction since the Asian financial crisis in 1998.

The COVID-19 pandemic has caused significant disruptions to businesses and their cash flow, with some pushed to the brink of insolvency. The directors of a company should be aware of their duties and potential personal liability if the company continues to trade while it is insolvent. These duties and potential liability may also apply to officers primarily responsible for the management of the company.

Overview of directors' duties

A director owes various statutory and fiduciary duties to the company, including:

Following the outbreak of the novel coronavirus (COVID-19) which has seen the global economy descend into a state of turmoil, companies around the world strive to weather the storm of unprecedented challenges to their businesses. As Malaysia undergoes the fourth phase of its Movement Control Order to further curb the spread of COVID-19, companies are already planning or putting in place the necessary measures to soften the impact of COVID-19 on their businesses.