ABC Sdn Bhd is a small private limited company with five shareholders. Its directors are Ali and Balu. Its objects clause states as follows:(i) to manufacture and sell biscuits;(ii) to buy and sell wooden furniture; and(iii) to carry on any other business, which in the opinion of the board of directors can be carried on with the above businesses of the company.In April 2011, ABC Sdn Bhd entered into a contract with XYZ Sdn Bhd, a steel manufacturing company, for the purchase of 90,000 kilograms of steel. The steel will be delivered to ABC Sdn Bhd next month. The decision to purchase the steel was made by Ali and Balu with the intention of making the company branch off into the manufacture of steel cabinets and other office equipment made of steel.Charles, a shareholder, believes that the contract for the purchase of the steel is outside the scope of the objects clause of ABC Sdn Bhd. He seeks your advice in respect of this matter.Required:Advise Charles on:
(a) whether the contract to purchase the steel is an ultra vires transaction; and (5 marks)