Ben is a non-executive director of 'OTL Ltd.' Raj is a director and the CEO of OTL Ltd. Mike is a director and the finance controller of OTL Ltd. Ben has a substantial shareholding in OTL Ltd. This has entitled Ben to appoint a nominee director, who happens to be Raj . 'HO Pty Ltd' is a wholly owned subsidiary of OTL Ltd. Ben requested, and Raj and Mike arranged, for HO Pty Ltd to advance $10 million to 'Dive Pty Ltd' - a company controlled by Ben. During the next two weeks Dive Pty Ltd used some of these funds to purchase OTL Ltd shares to the value of approximately $4 million. Soon after the advance and the purchase of the shares, Ben created a unit trust with Dive Pty Ltd as trustee. Units were issued to HO Pty Ltd at a price of $10 million. A further 10% of the units in the trust were issued to another corporation controlled by Ben, 'M2 Pty Ltd'. The trust property comprised of the shares in OTL Ltd and the residue of the $10 million advance. Over subsequent months, Dive Pty Ltd had the opportunity of selling the OTL Ltd shares at a profit but chose not to. Eventually they were sold at a loss of $2.5 million. The residue of the $10 million advance was used by Dive Pty Ltd to: (i) purchase from M2 Pty Ltd unlisted technology shares (they were purchased at the price M2 Pty Ltd had initially paid for them. They were almost worthless at the time of purchase and were ultimately sold at a loss of $3.8 million);and (ii) make unsecured loans to further corporations controlled by Ben. ASIC has received a complaint from a preference shareholder in OTL Ltd. He is angry that the board of OTL Ltd has not declared a dividend in many years "despite the fact that my shares have a guaranteed right to 10% annual dividends." He has outlined to the ASIC the above facts that he has discovered through his own investigations. He has complained that "the management of OTL Ltd" is appalling. ASIC now approaches you seeking your advice on the above matters.

REQUIRED Advice ASIC on whether Ben, Raj and Mike have breached any of their general law and/or statutory duties as a directors and outline the remedies and/or penalties which would apply if any general law and/or statutory director's duties have been breached.