LAW OF

INVESTMENT &
FINANCIAL
MARKET
Assignment 2 – Group Assignment

[SGS] Group 2

Lecturer: Esmira hackenberg | Class: Monday 11.30 AM | Word count: 3,582

 Team members name S-ID Contribution Signature
Nguyen Thuy Dan S3818310 100%

Hoang Le Thanh Mai S3760614 100%

Le Thanh Ngan S3774666 100%

Le Truong Mai Quyen S3777306 100%

Table of Contents

I. Issue.........................................................................................................................................2

II. Relevant laws & applications............................................................................................2

A. Good Faith..........................................................................................................................2

B. Exercise Power for Proper Purpose.................................................................................5

C. Disclosure and Conflict of Interest...................................................................................8

D. Misusing of Position.........................................................................................................11

III. Conclusion........................................................................................................................13

A. Conclusion........................................................................................................................13

B. Remedies...........................................................................................................................13

C. Recommendations............................................................................................................13

IV. Bibliography.....................................................................................................................14

1
I. Issue
The issues are whether Ash, Ken, and Tony, who are ABC Ltd’s directors, have
breached:
 Fiduciary duty to act in good faith in the best interests of the company and
corresponding statutory duty under s181(1)(a),
 Fiduciary duty to act for proper purpose and corresponding statutory duty under
s181(1)(b),
 Fiduciary duty to avoid conflict of interest and secret profits,
 Fiduciary duty to disclose and corresponding statutory duty under s191,
 Statutory duty to not misuse position under s182(1),

When
 Tony accepted the commission to receive $100,000 from David, Facilitas’s
director, to convince ABC’s directors to accept Facilitas’s takeover, without
informing other directors.
 Tony accepted Centrium’s commissions for acquiring ABC’s land, which he
transferred some amount of profit into his private bank accounts and received
$200,000, without informing other directors.
 Ash and Ken defeat Facilitas’s takeover bid. 
 Ash and Ken entered into a contract with Alexander, Edifici’s director, and
received a percentage of profits from completed commercial units’ sales, without
informing Tony. 
 Ash and Ken made shares allotment to Securitas, who gave luxurious gifts to
them, to defeat Centrium’s takeover bid, without informing Tony.

II. Relevant laws & applications

A. Good Faith
Fiduciary duty to act bona fide in the best interest of the company, corresponding with
s181(1)(a)1, requires directors to act honestly and sincerely in the best interest of the company.

1
Corporations Act 2001 (Cth) s 181(1)(a)

2
The legal test includes subjective, which is the rebuttable assumption that directors generally
believe they are acting in the best interest of the company, and objective elements, asking
whether the director behaved in the best interests of the company, as a reasonable director would
believe.

 Tony
The subjective element fails as there is no evidence for Tony believing he acted in the
best interest of the company for both Tony’s conduct with Facilitas and Centrium. Although
Tony stated the benefits of Facilitas’ offer toward ABC’s directors, Tony was paid by Facilitas to
persuade ABC’s directors. Hence, Tony’s persuasion was for Facilitas’ benefits, not for ABC’s
benefits.
Regarding the objective element, when the company is solvent, Parke v The Daily News
[1962]2 states shareholders’ interest is the company’s priority interest, which the shareholders
are held more important than employees when the newspaper company sold a majority of its
business and gave complimentary payments to its employees. Similarly, Tony did not put his
shareholders’ interests as priorities, and different from the case law, whose priority is the
employees’ interest, Tony’s priority interest is himself. His actions of taking bribes from
Facilitas and Centrium resulted in Tony’s recommendation of Facilitas, a company with a bad
reputation for acquiring and stripping companies’ assets, and ABC’s land is sold at a much lower
price to Centrium than its actual value. This affects ABC’s shareholders with the possibility of
asset value loss from Facilitas, and actual asset value loss from Centrium, resulting in decreasing
ABC’s and its shares' values. Considering the consequences affecting the shareholders’ interests,
a reasonable director would not act similarly to Tony. 
Failing the legal test, Tony breached fiduciary duty to act bona fide in the best interest of
ABC, which corresponds with s181(1)(a)3, when he negatively affects the shareholders’ interest
during his commissions with Facilitas and Centrium.

 Ash-and-Ken, -and-the-Smith’s-family

2
Parke v The Daily News (1962) Ch 927
3
Ibid s 181(1)(a)

3
 The subjective element is satisfied when Ash and Ken clearly stated their action is to
protect ABC’s assets from a company with a bad reputation, which benefits the shareholders as
ABC’s and its shares’ values are protected.
Regarding the objective element, Parke v The Daily News [1962] 4is applied. Contrarily,
Ash and Ken put ABC’s shareholders’ interests as a whole as priority before a group of majority
shareholders’ interests. Their action of rejecting Facilitas’s takeover protects ABC’s assets,
maintaining ABC’s and its shares’ values. Considering the benefits to ABC’s shareholders as a
whole, a reasonable director would act similarly to Ash and Ken.
Satisfying the legal test, Ash and Ken complied with fiduciary duty to act bona fide in the
best interest of ABC, corresponding with s181(1)(a)5, when they put ABC’s shareholders’
interests as a whole as priorities, when they reject Facilitas’ takeover offer.

 Ash-and-Ken, -and-Edifici’s-director
The subjective element fails when Ash and Ken signed for industrial parks from Edifici,
rather than commercial parks despite knowing commercial parks are more profitable. Hence, Ash
and Ken’s pure motive is to receive Edifici’s director commission.
Regarding the objective element, Parke v The Daily News [1962]6 is applied. Similarly,
Ash and Ken did not put their shareholders’ interests as priorities, different from the case law,
whose priority is the employees’ interest, Ash and Ken’s priority is themselves. Their actions of
taking bribes from Edifici’s directors resulted in less profit for ABC, as an industrial park, built
by Edifici, is less profitable than a commercial park. Hence, ABC’s value decreases, affecting its
shares’ value and shareholders. Considering the consequences affecting the shareholders’
interests, a reasonable director would not act similarly to Ash and Ken.
Failing the legal test, Ash and Ken breached fiduciary duty to act bona fide in the best
interest of ABC, corresponding with s181(1)(a)7, when they negatively affected the shareholders’
interest during his commissions with Edifici’s shareholders.

 Ash-and-Ken, -and-Securitas

4
Parke v The Daily News (1962) Ch 927
5
Ibid s 181(1)(a)
6
Parke v The Daily News (1962) Ch 927
7
Ibid s 181(1)(a)

4
 The subjective element fails. Ash and Ken’s purposes for share allotment, stated in the
meeting minutes, are to raise capital, reward employees, and prevent Centrium’s takeover.
However, there is no evidence for raising capital and rewarding employees’ purposes, and
whether preventing Centrium’s takeover benefits ABC. Furthermore, from the provided
evidence, their purpose also includes maintaining a good relationship with Securitas, rather than
Centrium, who have a bad relationship with ABC’s directors, and to maintain their director
power. Hence, Ash and Ken’s pure motives are for themselves.
Regarding the objective element, Parke v The Daily News [1962]8 is applied. Similarly,
Ash and Ken did not put their shareholders’ interests as priorities, different from the case law,
whose priority is the employees’ interest, Ash and Ken’s priority is themselves. Their action of
share allotments decreases current shareholders’ shares value (other than Centrium). However,
there is no proper reason for defeating Centrium’s takeover to explain how it benefits ABC’s
shareholders. Specifically, despite stating Securitas is a better long-term partner, there is no
evidence or reasoning to support the statement. Thus, the effects are considered detrimental to
ABC’s shareholders. Considering the consequences affecting the shareholders’ interests, a
reasonable director would not act similarly to Ash and Ken.
Failing the legal test, Ash and Ken breached fiduciary duty to act bona fide in the best
interest of ABC, corresponding with s181(1)(a)9, when they negatively affected the shareholders’
interest during their share allotments to Securitas.

B. Exercise Power for Proper Purpose

Fiduciary duty to exercise power for proper purpose, corresponds with s181(1)(b) 10,
requires directors to exercise their power for proper purposes. Howard Smith Ltd v Ampol
Petroleum Ltd [1974]11 presents the legal test, including identifying power whose exercise is in
the question, then identifying the proper purpose for the power, then identifying actual purposes
for exercising the power, then deciding whether the purpose was proper.

 Tony-and-Facilitas

8
Parke v The Daily News (1962) Ch 927
9
Ibid s 181(1)(a)
10
Corporations Act 2001 (Cth) s 181(1)(b)
11
Howard Smith Ltd v Ampol Petroleum Ltd [1974] UKPC

5
 As a director, Tony has the power to influence the decision-making process of responding
to a takeover bid offer for ABC’s interests. Regarding objective purposes, Tony mentioned
Facilitas’s takeover bid benefits all shareholders and stakeholders. Nevertheless, evidence of
receiving shows that $100,000 from Facilitas’s director proves that Tony’s actual motivation is
his personal benefit. Applying ASIC v Adler [2003]12, Adler, HIH’s director, used his position as
director position to control the trust and pay $10 million to Pacific Eagle Equity Pty Ltd (PPE),
where Adler Corp is the sole shareholder. PPE used part of the $10 million to acquire HIH
shares, and loans were made to entities associated with Adler. Adler’s purpose was held
improper when he purchased HIH shares to support its shares’ price for the benefit of his
personal HIH shareholding, meaning his purpose was for personal gains, harming HIH.
Similarly, Tony’s conduct was improper because the purpose is gaining personal benefit.
However, Tony has not physically exercised his power yet. Instead of exercising the power of
making decisions or forcing the board to accept the takeover, Tony used his verbal skill to
achieve his goals.
In conclusion, Tony did not breach fiduciary duty to exercise power for proper purpose,
corresponding with s181(1)(b)13, when he accepted Facilitas’s director’s commission.

 Tony-and-Centrium
As a director, Tony has the power of making decisions to raise ABC’s profit through
selling its property. Based on the evidence of receiving $200,000 from Centrium before selling
ABC’s land, the actual motivation is his personal profit. Tony’s purpose was improper, based on
ASIC v Adler [2003]14, with directors of both cases exercising power for personal benefits,
harming their companies. Specifically, Centrium’s land acquisition’s value was lower than its
market price. 
In conclusion, Tony breached fiduciary duty to exercise power for proper purpose,
corresponding with s181(1)(b)15, when he accepted Centrium’s commission.

 Ash-and-Ken, -and-Facilitas

12
ASIC v Adler [2003] NSWCA 131
13
Ibid s 181(1)(b)
14
ASIC v Adler [2003] NSWCA 131
15
Ibid s 181(1)(b)

6
 As directors, Ash and Ken have the power to influence the decision-making process of
responding to a takeover bid offer for ABC’s interests. Regarding objective purposes, they aimed
to protect ABC’s valuable assets for ABC’s shareholders as a whole rather than a group of
majority shareholders. The purpose is confirmed true due to Facilitas’s bad reputation rumour of
acquiring companies’ assets and aside from Tony’s good statements for Facilitas, there is no
evidence proving Facilitas’ takeover is beneficial for ABC. Applying Howard Smith Ltd v Ampol
Petroleum Ltd [1974]16, Millers issued share allotments to Howard Smith to decrease Ampol’s
power in Millers. The court held the act of shares allotments for specific buyers to shift power is
improper. Contrarily, Ash and Ken’s case did not have power shifting and are purely for ABC’s
benefit. Hence, Ash and Ken’s purpose was proper.
In conclusion, Ash and Ken did not breach fiduciary duty to exercise power for proper
purpose, corresponding with s181(1)(b)17, when they defeat Facilitas’ takeover.

 Ash-and-Ken, -and-Edifici’s-director
As directors, Ash and Ken have the power of making decisions to raise ABC’s profit
through its property. However, objective purposes were for them to get the percentage of profit
from renting. The purpose was improper, based on ASIC v Adler [2003]18, with directors of both
cases exercising power for personal benefits, harming their companies. Specifically, Edifici’s
intention of building industrial parks is less profitable for ABC than commercial parks.
In conclusion, Ash and Ken breached fiduciary duty to exercise power for proper
purpose, corresponding with s181(1)(b)19, when they accepted Edifici’s director’s commission.

 Ash-and-Ken, -and-Securitas
As directors, Ash and Ken have the power to issue shares, to bring reasonable benefits to
ABC. Regarding objective purposes, they claimed the allotment is to raise capital, reward
employees, and defeat Centrium’s takeover. There is no evidence of raising capital and
rewarding employees. For defeating Centrium’s takeover, information of “Centrium acquiring
substantial shares” for its takeover is enough as evidence. However, another purpose was to

16
Howard Smith Ltd v Ampol Petroleum Ltd [1974] UKPC
17
Ibid s 181(1)(b)
18
ASIC v Adler [2003] NSWCA 131
19
Ibid s 181(1)(b)

7
create advantages for Securitas who have better relationships with ABC’s directors and maintain
their director’s power. Applying Howard Smith Ltd v Ampol Petroleum Ltd [1974] 20, the act of
shares allotments for specific buyers to shift power is held improper. Similarly, Ash and Ken
issued shares to a specific buyer (Securitas), to shift Centrium’s potential power. Moreover,
applying Whitehouse v Carlton Hotel Pty [1987]21, Mr Whitehouse’s purpose is held improper
when he issued more shares to his sons to prevent Mrs Whitehouse and daughters from having
voting rights after divorcing. Compared to Ash and Ken, both cases were issuing shares to dilute
specific shareholders’ shares for their purpose. For Ash and Ken, it is to maintain good
relationships with Securitas, and their director’s power, which does not benefit ABC. Overall,
Ash and Ken’s actual purposes were improper.
In conclusion, Ash and Ken breached fiduciary duty to exercise power for proper
purpose, corresponding with s181(1)(b)22, when they issued share allotments to Securitas.

C. Disclosure and Conflict of Interest

Directors have fiduciary duty of loyalty, with no-conflict and no-profit as two limbs to
prevent directors to put themselves or some else before the company’s benefits to take
unauthorized benefits without disclosing to the company. The breach is avoided when fiduciary
duty of disclosure, corresponding to s19123, is complied, requiring directors to disclose to other
directors about ‘material personal interests’ relating to the company’s affairs. 
No-conflict limb prohibits directors from engaging in circumstances where they are to
prefer to put theirs, or someone else’s, interest above the company’s interest. In Boardman v
Phipps [1967]24, Lord Upjohn clarified no-conflict under ‘real sensible possibilities’, with the
breach happens when ‘a reasonable man looking at the relevant facts and circumstances of a
particular case would think that there is a real sensible possibility of conflict’. No-profit limb
prohibits directors from obtaining unauthorized profits using their director positions. In Regal
(Hastings) Ltd v Gulliver [1942]25, Lord Russel held liabilities emerged from ‘the mere fact of a
profit having’, and ‘in no way depends on fraud or absence of bona fide’. 

20
Howard Smith Ltd v Ampol Petroleum Ltd [1974] UKPC
21
Whitehouse v Carlton (1987) HC Aust
22
Ibid s 181(1)(b)
23
Corporations Act 2001 (Cth) s 191
24
Boardman v Phipps [1967] 2 AC 46
25
Regal (Hastings) Ltd v Gulliver [1942] 2 AC 134

8
  Tony
Applying Boardman v Phipps [1967]26, there is a ‘real sensible conflict’ when Tony
accepts personal benefits from Facilitas’ director ($100,000) and Centrium ($200,000 and profit
in private bank account), despite knowing the consequences to ABC’s profit. For Facilitas, its
reputation was to loot and steal assets from its acquired companies, while for Centrium, the land
is sold at a much cheaper price than the land’s actual value. By accepting the commissions, Tony
has put ABC into the possibility of losing valuable assets that brings profits to ABC, and directly
makes ABC loses profit from decreasing its land’s value. Hence, Tony had put his personal
interests over ABC’s interests. Applying Regal (Hastings) Ltd v Gulliver [1942] 27 for the no-
profit, Boston Deep Sea Fishing v Ansell [1988]28 reflects the conduct of taking bribes for a
commission, where the director was authorized to purchase ships for the company, and he took a
secret contract with the shipbuilders, which is unknown to other directors. Similarly, Tony did
receive personal profit ($100,000, $200,000, profit in private bank account) from Facilitas’s
director’s and Centrium’s commission.
Regarding full disclosures, discussions about ABC’s takeover and selling ABC’s land is
highly related to ABC’s affair as it affects ABC’s profit. Applying Fraser v NRMA Holdings Ltd
[1995]29, although NRMA had disclosures, it was still held as misleading and deceiving
members due to the lack of full and accurate disclosures. Hence, Tony’s case is considered much
more deceiving, with no disclosure about his dealings with Facilitas’ director and Centrium.
Failing both limbs of fiduciary duty of loyalty and breaching fiduciary duty of disclosure,
corresponding with s191, Tony breached fiduciary duty of loyalty when he put his ‘material
personal interest’ before ABC’s interests during his commissions with Facilitas’ director and
Centrium. 

26
Boardman v Phipps [1967] 2 AC 46
27
Regal (Hastings) Ltd v Gulliver [1942] 2 AC 134
28
Boston Deep Sea Fishing v Ansell [1988] 39 Ch D 339
29
Fraser v NRMA Holdings Ltd [1995] 55 FCR 452

9
  Ash-and-Ken, -and-Alexander, -Edifici’s-director
Applying Boardman v Phipps [1967]30, a ‘real sensible possibility’ occurred when Ash
and Ken signed a contract with Alexander for a bribe, despite knowing a business park is more
profitable for ABC than an industrial park, which is Edifici’s intention. Hence, by signing the
contract, they had favored their personal profit before ABC’s profit. Applying Regal (Hastings)
Ltd v Gulliver [1942]31 for no-profit, Ash and Ken’s case is similar to Boston Deep Sea Fishing
v Ansell [1988]32, where there is profit (taken from completed unit sales) from Alexander’s
commission. 
Regarding disclosures, the contract is related to ABC’s affair as it is ABC’s land, and
choosing a suitable park type affects ABC’s profit. Applying Fraser v NRMA Holdings Ltd
[1995]33, NRMA has inadequate disclosure, while Ash and Ken have no disclosure to Tony
about their personal profits and commissions. Hence, Ash and Ken’s case is more deceiving.
Failing both limbs and breaching fiduciary duty of disclosure, corresponding to s19134,
Ash and Ken breached fiduciary duty of loyalty when they prioritized their interests before
ABC’s interests to receive personal profits during their contract with Edifici’s director.

 Ash-and-Ken, -and-Securitas
Applying Boardman v Phipps [1967]35, a ‘real sensible possibility’ occurred when they
received Securitas Ltd’s luxurious gifts as it increased their favourability on Securitas Ltd.
Furthermore, Centrium Ltd’s acquisition can lead to new director appointments, which
diminishes the current board of directors’ power. For ABC, as there is no evidence of raising
capital and rewarding as the directors stated, and share allotments can create high possibilities of
share dilution, decreasing shares’ price, current shareholders (other than Centrium) are
negatively affected from decreasing ABC’s value. By making the allotments, Ash and Ken were
having personal interests over ABC’s interests. Applying Regal (Hastings) Ltd v Gulliver
[1942]36 for no-profit, it is satisfied as Ash and Ken did not receive any monetary benefits from
making the allotment. 
30
Boardman v Phipps [1967] 2 AC 46
31
Regal (Hastings) Ltd v Gulliver [1942] 2 AC 134
32
Boston Deep Sea Fishing v Ansell [1988] 39 Ch D 339
33
Fraser v NRMA Holdings Ltd [1995] 55 FCR 452
34
Ibid s 191
35
Boardman v Phipps [1967] 2 AC 46
36
Regal (Hastings) Ltd v Gulliver [1942] 2 AC 134

10
 Regarding full disclosures, the share allotment is related to ABC’s affair as it affects
ABC’s shareholders, where it reduces current shareholders’ power (other than Centrium). It is
reasonable to not inform Tony as he was on stress leave to avoid work. With Ash and Ken as the
only directors during the time of the conduct and their’s signature on the contract, the company’s
fully informed consent was obtained. Hence, different from Fraser v NRMA Holdings Ltd
[1995]37 that lacks disclosure, Ash and Ken’s conduct have full disclosures. Hence, it was not
deceiving.
Failing no-conflict limb but complying with fiduciary duty of disclosure, corresponding
with s19138, Ash and Ken can avoid breach of fiduciary duty of loyalty when they had personal
interests over ABC’s interests during their share allotment to Securitas.

D. Misusing of Position
Statutory duty to not misuse position under s182(1)39 prohibits directors from abusing
their director position to benefit themselves and someone else, or cause detriment to the
company.

 Tony
Applying ASIC v Adler [2003]40, Adler, a director of HIH Ltd, used his director position
to control the trust and pay $10 million to Pacific Eagle Equity Pty Ltd (PPE), where Adler Corp
is the sole shareholder. PPE used part of the $10 million to acquire HIH shares, and loans were
made to entities associated with Adler. Adler was held to have misused his position to gain
advantages for himself and cause loss for HIH. Tony’s commissions with Facilitas and Centrium
are similar, in which he gains advantages for himself, including $100,000 from Facilitas,
$200,000 and profit in a private bank account from Centrium. For detriment consequences,
although ABC suffered no loss during Tony’s commission with Facilitas as Tony’s proposal was
denied by Ash and Ken, Tony’s commission with Centrium decreased tABC’s land value,
decreasing ABC’s profit. 

37
Fraser v NRMA Holdings Ltd [1995] 55 FCR 452
38
Ibid s 191
39
Corporations Act 2001 (Cth) s 182(1)
40
ASIC v Adler [2003] NSWCA 131

11
 In conclusion, Tony breached statutory duty to not misuse position under s182(1)41 during
his commission with Facilitas and Centrium, in which he abused his position to gain personal
advantages for both commissions, and cause detriment to ABC during Centrium’s commission.

 Ash-and-Ken, -and-Edifici’s-director
ASIC v Adler [2003]42 is similar to Ash and Ken’s commission with Edifici’s director, in
which Ash and Ken gained personal profits, coming from completed commercial units’ sale in
the buildings and industrial rents, and caused detriments to ABC by signing a less profitable
contract. Specifically, they decreased profit that ABC should have had as building a business
park is more profitable than an industrial park, which was Edifici’s intention.
In conclusion, Ash and Ken breached statutory duty under s182(1)43 during their
commission with Edifici’s director, in which they abused their director position to favour their
benefits and harm ABC.

 Ash-and-Ken, -and-Securitas
ASIC v Adler [2002]44 is similar to Ash and Ken’s share allotments to Securitas, which
they gained personal profits, and caused detriments to ABC’s shareholders as a whole. Fearing
Centrium Ltd’s acquisition could diminish the current board of directors’ power, Ash and Ken
gained advantages to Securitas Ltd in exchange for maintaining their director power and
receiving expensive lavish gifts. Although they stated the purpose for share allotment was to
raise capital, reward employees, and defeat Centrium’s takeover, there is no evidence for their
purpose relating to raising capital and rewarding employees. With only the purpose of defeating
Centrium’s takeover, the share allotment will create high risks of share dilution, reducing the
shares’ value, affecting the current shareholders (other than Centrium) and lowering ABC’s
value.

41
Ibid s 182(1)
42
ASIC v Adler [2003] NSWCA 131
43
Ibid s 182(1)
44
ASIC v Adler [2003] NSWCA 131

12
 In conclusion, Ash and Ken breached statutory duty under s182(1)45 during their share
allotment to Securitas, in which they abused their director position to gain personal benefits and
harm ABC.

III. Conclusion
A. Conclusion
ABC Ltd can successfully sue Tony, Ash and Ken for violtaing the fiduciary duties,
including duty to act in good faith, exercise power for proper purpose, duty of loyalty and
disclosures. They also breached the corresponding statutory duty under s181(1)(a)46, s181(1)
(b)47, s19148, s182(1)49, when they abuse corporate finances, resulting in financial loss and
delaying ABC Ltd's commercial affairs.

B. Remedies
Directors, who have undisclosed conflicts of interests and secret profit, are accountable
for profits, meaning profits made from their breach of duty are given to the company. Since
directors breached their fiduciary duty, the court can apply injunctions to refrain directors from
engaging in particular conducts. When directors breached statutory duties, the court may also
apply civil penalties, including ordering compensations for damage suffered under s1317H50, a
pecuniary penalty for up to $200,000 under s1317G51, or disqualifying the directors from
management under s206C52. 

C. Recommendations
To comply with duties of directors, directors shall perform well for fiduciary
relationships owing to company, including disclosure, honesty, loyalty, and good faith.
Therefore, when exercising powers, they shall consider whether their actual motivation is acting
45
Ibid s 182(1)
46
Ibid s 181(1)(a)
47
Ibid s 181(1)(b)
48
Ibid s 191
49
Ibid s 182(1)
50
Corporations Act 2001 (Cth) s 1317H
51
Corporations Act 2001 (Cth) s 1317G
52
Corporations Act 2001 (Cth) s 206C

13
for the benefit of the company or personal interest to prevent causing detriment to business
activity or conflicting the interest of the company. If a conflict-of-interest transaction occurred,
the director shall disclose to solve the outcome as soon as possible. Significantly, each
transaction of the company shall be observed carefully by directors or auditors to avoid
detriment.

IV. Bibliography

14