1. Based on the Companies Act 2016, advise the relevant parties on the following situations.

(a) GRIT Bhd (GRIT) is a

listed issuer. Steve, one of the directors, argues that he was approached in a

social setting in which the business opportunity was first offered to him

instead of to GRIT. Advise GRIT on Steve's claim.

(30 marks)

(b) Does GRIT's lack of

capacity permit Steve, as the director, to take the corporate opportunity?

Advise GRIT.

(10 marks)

The following are reference notes to cover in the answers:

Competing Companies CA 2016 5218(1-2] - Prohibit director from engaging in business in competition with the company: - Gain directly i indirectly - Benet for himself or any other person - Cause detriment to the company The director must obtain the consent of the general meeting to avoidr iiabiiity for breach. The level of a director's involvement in a competing business is signicant to establish breach of duty. It is not breach of duty for the director to accept an offer to manage another company that might become capable of competing with his current company. However, he cannot assist in establishment and subsequent operations of the other company business whilst still with his current company. There is a breach of duciary duty for being involved in a competing business if a director knowingly import goods which are being imported by his company for sale and distribution. CA 2016 Prohibition against improper use of property, position, etc. on 2016, 3213(1) A director or ofcer of a company shall not, without the consent or ratication of a general meeting {a} Use the property of the company; {b} Use any information acquired by virtue of his position as a director or ofcer of the company; {:3} Use his position as such director or ofcer; {:1} Use any opportunity of the company which he became aware of, in the performance of his functions as the director or ofcer of the company; or {e} Engage in business which is in competition with the company, To gain directiy or indirectly, a benet for himself or any other person, or cause detriment to the company. Secret Profit and Conflict of Interest 1. No-Profit Rule Regal (Hastings) Ltd V Gulliver [1967] 2 AC 134 . Common law component is duty to avoid conflict of interest . Directors shall not make secret profit out of their position . The use of corporate property, information, opportunities without permission of the company . The director is in breach of fiduciary duty https://simplestudying.com/regal-hastings-Itd-v-gulliver-1967-2-ac-134/ The fiduciary duty is strictly applied by the court, does not require proof of damage or loss suffered by the company >Even though: (1) the director AND the company both benefited from the transaction. (2) the company is lack of financial resources (3) The company could not exploit the transaction