Question 3

Abbey Road Pte Ltds directors are John, Paul, Ringo. Its shareholders are John, Paul, Ringo and George. The company deals distribution of music CDs in Singapore and around the Asia Pacific Region.

Recently, George was at a music store and while browsing through the stores CD selection, he chanced upon several CDs belonging to US companies that have always used Abbey Road Pte Ltd to distribute their material in Singapore and the Asia Pacific Region. Upon closer examination of the CDs in question, he saw that they were imported and distributed by a local company, Yoko Productions Pte Ltd. Upon checking with the Accounting and Corporate Regulatory Authority (ACRA), the regulator of business entities, public accountants and corporate service providers in Singapore, George discovered that the directors and shareholders of Yoko Productions Pte Ltd are John, Paul and Ringo. He then realised that John, Paul ad Ringo have diverted Abbey Roads business to Yoko Productions, and that as the result of this, Abbey Roads profit margins have been negatively affected.

At the next shareholders meeting of Abbey Road Pte Ltd, George confronted the other three shareholders over the diversion of business from Abbey Road to Yoko Productions. John, Paul and Ringo contended that they had done nothing wrong and that it was perfectly legal to have started another business. They then proceeded to pass a resolution that approved their actions, and further authorised them to continue to divert business away from Abbey Road to Yoko Productions.

Required:

Advise George if there is any common law and/or statutory remedy available to him to challenge the resolution passed by the other three shareholders of Abbey Road Pte Ltd. (Total 450 words)