Simpson is the managing director of Developers Ltd., a company engaged in the

business of acquiring and developing building sites. Developers Ltd. wishes to buy a

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piece of land on which to build a factory. Simpson, whilst out looking for a site which

would suit the company for this purpose, discovers a piece of land which will soon

adjoin a new main highway. Realising the value of the land for development as a

factory site, Simpson, without informing the shareholders in Developers Ltd., purchases

the land on his own behalf and subsequently sells it to an engineering company at a

substantial profit. Hawkins, a major shareholder in Developers Ltd. learns of these

transactions and tells Simpson that he objects to his conduct and intends to raise the

matter at the forthcoming annual general meeting. Simpson replies that he is not aware

that he has done anything improper, especially as Developers Ltd. might not have been

able to raise sufficient funds to purchase this particular site itself. Advise Hawkins

generally and state what action, if any, can be taken against Simpson for any possible

breaches of his duties as a director.