Kyrie, Zion and Zahlia were all directors of a large public company, MINDZ Ltd. Kyrie was the managing director, Zion was the finance director, and Zahlia was a non-executive director. The board approved a $1 million loan to be granted to PSYCHO Ltd, without obtaining security for the loan and without ensuring that MINDZ Ltd's normal investment committee approval process was followed. Also, Kyrie had not ensured safeguards and controls were in place to cater for the potential conflicts of interest in MINDZ Ltd considering a loan to a company controlled by one of MINDZ Ltd's own directors. The borrower, PSYCHO Ltd, was in fact controlled by Zion and the loan money was used to fund Zion's gambling activities.

The unusual circumstances and nature of the unsecured $1million loan by PSYCHO Ltd to MINDZ Ltd was reported to the ASIC. ASIC argued that Kyrie has breached her duty of care towards the company. On the other hand, Zion had breached his statutory duties of good faith and to not act for an improper purpose.

Do you agree with ASIC and would the business judgment rule defence under s 180(2) apply here?