Nectar Pty. Ltd (Nectar) runs a fresh juice business from Hunter Valley, NSW. There are three shareholders: Anthony, Jenny and Chandan. Anthony holds 200 shares, Jenny holds 120 shares and Chandan (an employee of the company) holds 50 shares. All three have also been directors since the registration of the company. Jenny is the Managing Director and Chairperson of the Board. 

A friend of Jenny approached her, asking whether Nectar would be interested in investing in a new company, Nirvana Pty. Ltd (Nirvana) that owns a few local orchards growing oranges and nectarines. Jenny said she would be personally interested but would also put it to Nectar’s Board of Directors at its next meeting. 

At that meeting Anthony said it sounded a bit vague and he was not interested in further diversifying. Chandan thought it was a good idea but he generally agreed with whatever Anthony said. At the following board meeting, Jenny asked Anthony and Chandan to approve a large loan to her at low interest as she was going to renovate her house which Anthony and Chandan approved. Jenny used the loan money to buy a large amount of shares in Nirvana. She was also appointed a director of Nirvana. Six months later the share value of Nirvana increased substantially. Anthony and Chandan have now realised that Jenny has made a large profit from investment in and believe that Jenny should pay that to NECTAR. Jenny has refused.

Required: 

DO NOT REPEAT THE FACTS BUT discuss whether any of the directors in this case scenario have breached or may be about to breach their directors’ duties. Note: only discuss the duties in the Corporations Act 2001.