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GROUP MEMBERS
Muhammad Nur Sadiqin Bin
A146690
Mohd Khusni
Kevin Brendan Kung
Choo Wen Chun
Nurul Eleena Roslan
Nurul Farahusna Razak
Nur Fatin Bintin Mohamad
A146459
A146487
A146474
A146440
A146475
Farid
Steward Lee Wai Foong
Amalina Johar
Vesvanathan Jeevaji Ganaesan
Nazrul Farid Bin Amirudin
Anis Asmira bt Amir
A146973
A146472
A146468
A146481
A146421
Sharifuddin
Wan Nur Nini Adila Binti Wan
A145485
Omar
Muhammad Hafizuddin Bin
A146670
Salehuddin
Mohamad Naufal bin Mohamed
A146461
Nasorllah Antezem
Nor Hanani Mazlan
Ooi Onn Kit
Muhammad Farhan Bin
A146436
A146434
A145508
Khairuddin
of his intention to leave Listco and join Interco in the event Listco rejects the offer.
Dealing with the first fact, the court in the case of Peso Silver Mines Ltd v Cropper,
stated that a director is allowed to take an opportunity for himself without the
necessity of disclosure to the company if the company had genuinely rejected the said
business opportunity. Applying this principle to the present case, in light of the fact
that Listco had bona fide rejected the opportunity evidenced by the phrase after
detailed consideration of the Listco board and without any mention of Garys
influence to that end, we opine that Gary has acted lawfully in leaving Listco and
joining Interco. At this juncture, we would like to emphasise that though Gary had no
obligations to disclose his intentions to the Listco board, he had taken it upon himself
to do so. In the case of Queensland Mines Ltd v Hudson, if a company is fully
cognizant of a directors intention to take up an opportunity which was rejected, the
director would not be deemed to be in breach of his duty if he makes a profit out of
the opportunity.
In conclusion, we believe that since Listco had bona fide rejected the business
opportunity and Gary had disclosed his intentions to the Listco board, Listco cannot
claim the RM8 Million profit made by Gary in relation to his investment in On-Line
Groceries as Gary cannot be said to have breached his duty.
commission and the director did not report to the company of the said bonuses and
later was found out receiving it. The court held that the director must return the
commission as he had made secret profits out of the contract made on behalf of the
company.
Another case that can be referred to is Regal Hastings v Gulliver where in this case,
the court ordered the directors to pay back all the profits that they had made by selling
the shares to the new Board of Directors of the company as the opportunity for them
to make the profits come from their position as the director of the company. The court
further held that without their position as directors, they will never have the
opportunity to gain such profits. The next case to be referred is Industrial
Development Corporation v. Cooley, where the director who was also an architect
was asked to negotiate a contract with the Gas Board. In the negotiation, the director
found out the Gas Board was not prepared to give the contract to the company but was
instead prepared to give it to the director personally. Stating it was a failed negotiation
to the company, he later resigned from the company and subsequently successful in
obtaining the contract from Gas Board as well as gaining substantial amount of profit.
The court held that the said director must return all the profits received to the
company even though it did not suffer any losses as he had gained the profits by his
position as a director of the company. Hence, he had breach his fiduciary duty by
making secret profits out of his position as a director.
However, in Peso Silver Mines Ltd v Cropper, the court held that the directors are
free to keep the profits that they received out of their position as directors if the
company itself rejected the offer made by the third party who give the profit to the
director. Applying these principles to the present case, we truly believed that although
Gary did not disclose his intentions to join Interco, Listco cannot recover RM8
Million as they themselves had bona fide rejected the proposal after detailed
consideration of the Listco Board. Although Garys silence contributed to breach of
fiduciary duty, we do believed that after an offer was rejected directors are able to
comply with the offer as long as it does not in reliance of fraudulent actions.
In conclusion, we believe that since Listco had bona fide rejected the business
opportunity even though Gary did not disclose to the board, Listco cannot claim the
RM8 Million profit made by Gary in relation to his investment in On-Line Groceries.