Case Study of LIV Pte Ltd-Free-Samples for Students-Myassignment

Questions: 1.Advise Ang and Ong on the breaches of duties by each of Boon and Fong. In your answer, you are expected to advise on the remedies available for LIV Pte Ltd. 2.Ang and Ong are worried that they would be implicated by the actions of Boon and Fong. Advise each of them on whether they would be liable for the actions of their fellow directors. In your answer, you are expected to advise each of Ang and Ong on the remedies and/or defences available to each of them. 3.In a separate meeting with Wen, Yang and Zhao, advise them on their rights and courses of actions available to them based on their concerns. Answers: 1.The Corporation codifies fiduciary duties of the director, which includes the directors and the executive directors. An officer who holds a fiduciary position is the duty of loyalty and care. The duty of loyalty for the officer to have good faith and benefit of the company in order to avoid any argument conflict between the company and the affairs. This duty requires revealing the information relating to the company to receive the position. An officer did not act in good faith and neither acted in prejudice to the company[1]. The above case is related to a listed company LIV Pte Ltd which is a startup company and it provides software and website solution in the area of Singapore and in Asia. There are four directors in the company named Ang, Boon, Fong , Ong having 0%, 50%, 25% and 10% shareholding respectively. There are two fundamental principles as regards the position of directors. First they are trustees of the company`s money and property in the sense that they must account for all the company`s money and property over which they exercise control and must refund to the company any money or property which they have improperly paid away. A example of a case where the purchase by the second respondent of the yacht,Berjaya Malaysia, was misused of the company`s funds and the moneys which he paid out or for which he had himself reimbursed from the company`s funds in respect of the donations to the Sarawak Chinese Association and SNAP were improperly paid away. The second respondent should therefore take overBerjaya Malaysiaand pay to the company all the money spent on it and pay the company the amount of the donations paid to the political parties As per the rule inFoss v Harbottle(1843) 67 ER 189 did not preclude the appellant from taking action as the acts complained of in this case constituted a fraud in the minority of the shareholders and quite apart from the question of fraud the rule is no bar to an individual shareholder making an application to the court. The above case relates to a situation where both the directors Ang and Ong received whistleblower letter from the shareholders or any authority claiming that the affairs of the company are conducted in a manner, which is corrupted and fraudulent. The crime or wrongdoing could be in the form of fraud, deceiving employees, corruptions, or any other act, which misleads people. It lays down the complete framework to investigate alleged cases of wrongdoing. The whistle blowers letter lays down and uncovered the matters where the directors has to investigate the following issues which relates to the investigation. Situation I. Boon, one of the directors has commenced an act, which relates to a case where he being the director has authorized a loan to Bean Pte Ltd, which amounted to $ 500,000 to an unrelated company, but later it was found that Boons brother owned the company. This transaction is treated as a related party transaction. As per the Corporation Act, a company cannot directly or indirectly provide loan or book debts to any person or the directors to whom the directors of the lending company are directly or indirectly related or interested. The remedies available to the company are that the company can sue the officers or directors of the company. If any of the directors of the company violates the provisions of the Act then they shall liable for severe penalty along with the company[2]. Any transaction made by the director which is not of arms length price shall be shall be treated as invalid. The director Boon in the above case authorized the loans amounting $ 500000 to another unrelated party but it was found that Bean Pte Ltd is a wholly owned company of Boon brother therefore it attracts the provision of related party transaction [3]. On the other hand, LIV Pte Ltd acquired a company, which is an advertising company and was acquired at a stake value, which is 35% above market value, and Pong held a stake of 50% in the acquisition. Therefore, it attracts the provision of related party transaction[4]. 2.Ang and Ong worried if the application and the doing of the directors Boon and Fong are not correct and then the directors will liable for penalty. If the directors are not involved and is not liable for the actions of the defaults .The directors who are severally liable and is involved in the whole issue shall be severally be given to penalty and will be punishable. If they prove they were not involved in the whole issue and they were not guilty and was not present during the default then they will not be held liable for the mistakes[5]. The defenses and the remedies, which were available to both the directors, are not available for the work and then the directors were noted about the acquisition after it was done. They were notified about the case after both the directors completed the acquisition. The defenses, which they can apply, are that they can apply to the company that they were not at all involved in the case so that the person is not having any problem[6]. 3.In the separate meeting of the, shareholders Wen, Yang and Zhao, it was discussed they had the issue that they were unhappy with the business transactionand how the whole plan is been conducted thus they applied to the company that acquisition was a matter that should be discussed with the shareholders of the company. It requires the resolution of the shareholders of the company by way of a special resolution and then the acquisition should have been made. Three of the shareholders complained that they did not call meeting for the shareholders, the acquisition was done by way of not informing them, the managing director had incurred debts, they went into bankruptcy and therefore hey worried about the conditions o the company, and then they were involved with the whole case[7]. They were worried about the prospects of the company that the company believed that they propose to remove the directors of the company for the general meeting. The shareholders have the rights to apply to the company therefore; they can apply to the company so that their rights and actions can be taken so that their concerns are resolved. The shareholders have the right to apply to the based on the actions to the court of company laws[8]. References Coffee Jr, John C., Hillary Sale, and M. Todd Henderson. "Securities regulation: Cases and materials."(2015). McQueen, Rob.A Social History of Company Law: Great Britain and the Australian Colonies 18541920.Routledge,2016. Subedi, Surya P.International investment law: reconciling policy and principle. Bloomsbury Publishing,2016. Fooks, Gary, and Anna B. Gilmore. "International trade law, plain packaging and tobacco industry political activity: the Trans-Pacific Partnership."Tobacco control23.1 (2014): e1-e1. Grant, Robert M.Contemporary strategy analysis: Text and cases edition. John Wiley Sons, 2016. Sornarajah, Muthucumaraswamy.The international law on foreign investment. Cambridge universitypress,2017 Coffee Jr, John C., Hillary Sale, and M. Todd Henderson. "Securities regulation: Cases and materials."(2015). Coffee Jr, John C., Hillary Sale, and M. Todd Henderson. "Securities regulation: Cases and materials."(2015). McQueen, Rob.A Social History of Company Law: Great Britain and the Australian Colonies 18541920.Routledge,2016. McQueen, Rob.A Social History of Company Law: Great Britain and the Australian Colonies 18541920.Routledge,2016. Subedi, Surya P.International investment law: reconciling policy and principle. Bloomsbury Publishing,2016. Fooks, Gary, and Anna B. Gilmore. "International trade law, plain packaging and tobacco industry political activity: the Trans-Pacific Partnership."Tobacco control23.1 (2014): e1-e1. Grant, Robert M.Contemporary strategy analysis: Text and cases edition. John Wiley Sons, 2016. Sornarajah, Muthucumaraswamy.The international law on foreign investment. Cambridge universitypress,2017.