ACCT 7270 HK Class Lecture 2 (Jan- Mar 12-13)

Art 148

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properties of the company.” (art. 148) 董事,监事,高级管理人员应当遵守法律,行政法规和公司章 程, 对公司负有忠实义务和勤勉义务。 董事,监事,高级管理人员不得利用职权收受贿赂或者其他非 法收入,不得侵占公司的财产。
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1. Directors’ Fiduciary Duties 2013/2/18 16 This is an equitable concept. A director must voluntarily report to his company all the relevant information, if he thinks he has breached his fiducially duty. The guiding principle is fairness . This duty has three aspects: Directors must prevent a conflict between his interests and his company’s interests. He need not cause his company to suffer any loss and need not be dishonest towards his company. Lord Russell: “(Director’s) liability arises from the mere fact that (personal) profit has been made (from his company while he is a director).” The director must then account to his company for the projects made.
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PERCIVAL V WRIGHT Shareholders of the co approached the directors desiring to sell their shares and two of the directors and the chairman agreed to buy, but did not disclose to the sellers that the board was negotiating a takeover bid by an outsider at well above the price they had agreed to pay for the shares. The sellers claimed that the directors stood in a fiduciary relationship towards them as shareholders and that the transfers were therefore voidable for non-disclosure. It was held There was no fiduciary relationship between the directors and the shareholders individually. There was no question of unfair dealing. 2013/2/18 17
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Item Software (UK) Ltd v Fassihi (2005) UK The managing director of IS was negotiating better terms with its supplier of software products, IG, and discovered that F, IS’s sales and marketing director, had secretly approached IG in his personal capacity with a view to setting up his own company to distribute IG’s products. IS dismissed F and then brought proceedings alleging that F was in breach of duty in 1. seeking to divert the contract with IG to his own company and 2. Failing to disclose his own wrongdoing. The first allegation failed but the second was successful and F appealed. 2013/2/18 18
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The Court of Appeal held F’s duty of loyalty required him to disclose his own misconduct. It was explained that to hold otherwise might result in the company making erroneous decisions because it lacked essential information and would be inefficient in economic terms. 2013/2/18 19
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REGAL (HASTINGS) LTD V GULLIVER (1942) UK R Ltd owned a cinema and the directors decided to purchase two more cinemas in the same area and then to sell all three as a ‘going concern’. They formed a subsidiary co to lease the other two cinemas, and the landlord insisted that the co had a paid-up share capital of £5000.
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