Lecture 10b2

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Unformatted text preview: Duty to Avoid Conflicts of Interest Prime fiduciary obligation s based on common law and based s.132 (“officers & agents”) s.132 s no need to prove no s x loss to co x unfairness x fraud or dishonesty Payments to Directors No payments to fiduciaries No unless permitted by articles/memo (e.g. Tab A Art 70) 70) s excessive remuneration may be excessive oppressive (s 181) oppressive s Loans prohibited except exempt prohibited private companies (ss 133, 133A)-”persons connected”s122A s122A s includes guarantees s ex’s s performing duties, purchasing performing home, employee scheme, related co related s civil and criminal liability for civil directors in breach directors s Prohibited share/asset transactions-s.132G A co is prohibited from co acquiring shares/assets in another co without GM approval approval s if s its directors, shareholders (+ its persons related) also have substantial stake (5%+) in target co co s share issue void s exs s 3 yrs+, rights issue, related co’s, yrs+, s Related party property transactions s 132 C approval of GM for 132 disposal of main undertaking disposal s s 132 substantial non-cash 132 transactions transactions s s.132E A co is prohibited from entering co into substantial non-cash transactions transactions s with directors + persons with connected s ex’s-s.132F s approval by GM s winding-up s Hco and wholly owned subco s arms’ length transactions arms’ s 3 Facets of the conflicts rule secret profits rule three tests- The Board of Trustees of the Sabah Foundation v Datuk Syed Kechik Kechik s rule against contracting with co s rule against competing with co s x Regal (Hastings) v Gulliver Undisclosed personal profits s Undisclosed benefits x Furs v Tomkies s misuse of co property/funds x Davies v Davies s taking up a corporate taking opportunity opportunity x Cook v Deeks s Misuse of information x Thomas Marshall v Guinle Confidential Information Thomas Marshall (exporters) Thomas Ltd v Guinle s Ov...
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