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The prosecution of James Phang Wah and Jackie Hoo Choon Cheat directors of an insolvent company, Sunshine Empire - Essay Example

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The researcher of this article reports on the prosecution of James Phang Wah and Jackie Hoo Choon Cheat’ directors of an insolvent company, Sunshine Empire, a multi-level marketing company that sold packages while promising higher returns…
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The prosecution of James Phang Wah and Jackie Hoo Choon Cheat directors of an insolvent company, Sunshine Empire
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Download file to see previous pages This paper illustrates that the firm swindled investors who bought lifestyle packages. The firm also promised investors returns which were not from genuine profits but were actually funds recycled from new members joining the scheme. These two scenarios constituted criminal law. Another case is where Phang’s wife was paid a commission of nearly 950,000 US dollars for her work as the company’s group sales director, a job she never had or did. Sunshine empire was a corporation. Therefore all its operations were governed by the corporations’ law that existed. Some of the requirements of this law are proper maintenance of books of accounts. This company never kept proper books of account. On the other hand, a company is normally formed with the sole object of not dealing in illegal trade. The company also breached this by processing uncensored and obscene films. All these cases led to the breach of corporations’ law. The company is being wound up. Therefore, the Commercial affairs department has seized about twenty-one million US dollars and will establish how these funds should be disbursed to the firm’s creditors. This constitutes property law. The directors’ intention of selling 26,000 packages and earning 180, 000 US dollars was unacceptable. They knew that the scheme would fail. An important aspect of Law of contract is ‘acting in good faith.’ The directors breached this provision. On the other hand, Phang’s wife is also being fined for falsifying payment vouchers. This constituted a breach of contract law. How the Law helps in the following Situations Allows people to Organize and Plan Law in itself can help people organize and plan their future actions. In the case of Sunshine Empire, investors are applying the provision of the law to plan their future actions. This is evidenced by the fact that they buy packages from Sunshine Empire with the hope that they will get higher returns. There was a risk though with such investment as the company could collapse in the future leading to heavy losses to investors; and true to this, the company eventually went under receivership. How Law Encourages or discourages Particular activities Law can act to encourage or discourage certain activities. The prosecution of directors is a common example where the law doe not permit swindling of investors money through fraudulent activities. The directors defrauded the public of their through false investment activities, hence had to pay for their illegal acts (Howitt, p68). The law also acts to encourage compensation in cases of losses being suffered by a given party to a contract. This is seen when the commercial affairs department of company sets aside money to disburse to the firm’s creditors. How Law Creates Rights and Duties that can be enforced The contract between Sunshine Empire and its investors is a clear indication of a situation where law can create rights and duties which can be enforced. The investors invest their funds in the hope of higher returns in the future. The company gets wound up and the Commercial Affairs Department sets aside funds to settle creditors’ claims. By settling the creditors claim, a right of compensation in case of damages or loss is being enforced. How Law Provides remedies when Rights are interfered with or duties are not discharged In this case, creditors are being given funds set aside to cover for their losses as the company goes into liquidation. This clearly shows how law can be used to provide remedy in case of interference with somebody’s rights or where duties in a contract are not fully discharged. Why it is Important to know the law in the circumstances described in the Media report Members of the public at large should know the ...Download file to see next pagesRead More
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