Directors: Law Suits, Liabilities and Powers

Course details

Setting up a company may appear to provide one with limited liability. However, doing business through a company imposes many onerous duties. Not being aware of one’s responsibilities could lead to penalties from the authorities as well as personal lawsuit. This course aims to equip participants with the knowledge to avoid such dangers.

Who should attend?

This 2 day seminar is meant for Chief Executive Officers and Company Directors. It will also be useful for accounting and finance staff as well as those dealing with CEOs, directors and corporate matters such as audit firm staff and corporate banking staff.

Course Outline

Appointment of Directors

• qualifications and disqualifications.
• Shadow directors and de facto directors.

Removal of Directors

• proper procedures
• the Malayan Diary case.
• Claims for compensation

Duties-

• Fiduciary duties – section 157 and acting honestly –what this means. Avoiding liability when taking personal business opportunites. Various tests used by courts – mere possibility of conflict, maturing business opportunity.
• Reasonable diligence – the Lim Weng Kee case
• Discussion of key note case – the National Kidney Foundation case

Insider Trading

• offences under the Securities and Futures Act.
• When is information price sensitive and confidential?
• Liability for insider trading criminal, civil penalties and claims by company.
• Impact of Australian cases
• The Kelvin Lew case

Duties of Disclosure

Protection against liability

• waiver by company
• directors and officers insurance
• section 391

Management Power of Directors

• Situations when shareholder approval is needed.
• Unfair Prejudice
• Authority of directors
• Asia Pacific Breweries case

Accounts and the Directors

• Creative accounting (the Haw Par case).
• Incorrect financial statements (the Centro case).
• Fraud and auditors’ negligence.

Law suits against Directors

• Unfair prejudice and oppression
• use and misuse of section 216A (statutory derivative actions).

Personal liability of directors

• lifting corporate veil cases (including the Children’s Media case).
• Liability in tort (including the Meinhardt and Mintwell cases).