Vivian Chen in the year 2005 the secretary of Manfold Toy Company told Daniel Kot about plans to prepare corporate governance structure by including the best of the practices of other companies. This would be done after benchmarking the companies, and then adopting the best internal governance practices of the firms. This will improve the internal governance of Manfold. Upon hearing this proposal Daniel said that first of all the rules and regulations as set by Hong Kong exchange would be first implemented and then if there is any need a stronger internal governance mechanism can be obtained. Thus the proposal is never pursued, although it would have led to implementation of better internal governance (Jonson 262).
Mitchell and Meyers decided to appoint Big Capital to facilitate the process of takeover by acting as a consultant. In the process Mitchell & Meyers contacted Maggie Mok who happened to be one of the owners of Big Capital. Maggie Mok also happened to be one of the directors of Manfold Toy Company. Maggie Mok decided to deliberately hide the information from Mitchell and Meyers regarding the financial distress through which Manfold is going through with the impending danger of facing bankruptcy in On Yee Exports. Maggie’s Mok was promised to be paid of a whopping HK$20 if it plays a pivotal role in the Takeover process (Gleeson 287). Maggie deliberately hid the critical information from Mitchell and Meyers in order to obtain the consultancy fee.
During audit process, Ken informed abnormality in the accounts regarding the decrease in the maintenance cost of the machines despite massive increase in the production. Upon hearing the news Joseph decided to do ignore the information and asked Ken to fasten up the audit process.
The company boasted of producing high quality materials using the state of the art machinery and using the good quality materials. In order to decrease the costs, the Daniel Kot decided to make changes in