DISCHARGE OF DUTIES SHALL NOT MAKE IMPROPER USE OF INFORMATION ACQUIRED BY

Discharge of duties shall not make improper use of

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DISCHARGE OF DUTIES SHALL NOT MAKE IMPROPER USE OF INFORMATION ACQUIRED BY VIRTUE OF POSITION TO MAKE PROFIT FOR HIMSELF OR ANY PERSON OR CAUSE LOSS TO COMPANY BREACH OF S.157 IS AN OFFENCE. DIRECTOR HAS TO RETURN PROFITS MADE BY HIM OR BE LIABLE FOR LOSSES SUFFERED BY THE COMPANY (SINCE THE COMPANY COULD HAVE OTHERWISE GAINED) Act honestly: must act in the best interests of the company, must not place himself in a position of conflict of interests and must not use his powers for improper purposes (for instance, no receiving bribes or illegally tell financial information regarding shares to a third party) Cannot leak information relating to the company to another competitor Due diligence  signing of bank cheques etc. Proper delegation of duties
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CASE ON S.157 CHANG WAS AN ALTERNATE DIRECTOR OF ST MARINE LTD DURING HIS TERM IN OFFICE, BRIBES AT LEAST $6.5 M IN BRIBES PAID TO AGENTS OF ST MARINE’S CUSTOMERS, OF WHICH CHANG WAS NOT AWARE (NEGLIGENCE  HE OUGHT TO BE AWARE OF THE FINANCIAL INFLOWS AND OUTFLOWS) CHARGED UNDER S.157 FOR FAILING TO USE REASONABLE DUE DILIGENCE IN HIS CAPACITY AS ALTERNATE DIRECTOR OF ST MARINE A MONTH AFTER CHANG JOINED THE COMPANY, FINANCIAL CONTROLLER INFORMED HIM THAT MORE THAN $3M CASH PAYMENTS WERE MADE CHANG BELIEVED SUMS PAID FOR ENTERTAINMENT OR AS LEGITIMATE AGENCY COMMISSIONS AND SO FAILED TO ASK ABOUT THE LEGALITY OF SUCH PAYMENTS Alternate director: just attending the meeting for the director who is not around
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CHANG SHOULD HAVE SUSPECTED THERE WERE ILLEGAL PRACTICES GOING ON IN MITIGATION – CHANG HAD MADE CERTAIN MISTAKEN ASSUMPTIONS AND WOULD HAVE TAKEN ACTION HAD HE KNOWN OF THE ILLEGAL PRACTICES ON 5 JANUARY 2017, STATE COURT ORDERED CHANG TO SERVE A COMMUNITY SERVICE ORDER OF 14 DAYS CRIMINAL RECORD UPON SERVING COMMUNITY SENTENCE? SINCE HE DIDN’T ACTUALLY COMMIT THE BRIBE ITSELF IT IS QUITE LENIENT  IT DOES NOT REMAIN ON HIS CRIMINAL RECORD (HELP HIM START AFRESH) RECORD OF COMMUNITY SENTENCE SPENT ON DATE THE SENTENCE IS COMPLETED: 7DA REGISTRATION OF CRIMINALS ACT Should check the returns for such a high level of expenses Mitigation: to minimize the loss
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S.162 COMPANIES ACT S.162 CA: NO LOANS OR GUARANTEES TO DIRECTOR OR FAMILY OR ANOTHER COMPANY IN WHICH DIRECTOR HAS MATERIAL INTEREST (20% OR MORE OF VOTING POWER) EXCEPTIONS (WITH MEMBERS’ APPROVAL) LOAN SCHEME (INCLUDING HOUSING LOAN TO BUY A HOME) FOR ALL EMPLOYEES REIMBURSEMENT OF EXPENSES BREACH OF S.162: OFFENCE. DIRECTOR CAN BE LIABLE FOR LOSSES SUFFERED BY COMPANY If he spent on anything such as transport or dealt with clients outside (for instance, entertainment but there is usually a cap), accommodations on business trips
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S.168 COMPANIES ACT NO COMPENSATION FOR LOSS OF OFFICE UNLESS APPROVED BY MEMBERS OR STATED IN EMPLOYMENT CONTRACT BREACH: DIRECTOR HAS TO RETURN THE MONEY Agreement made beforehand
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S.169 COMPANIES ACT ANY PAYMENTS TO DIRECTORS E.G. DIRECTORS’ FEES AND ALLOWANCES MUST BE APPROVED BY THE MEMBERS (APPROVED DURING THE ANNUAL GENERAL MEETING) BREACH:
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