Business Association

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(a)(i) A director can be removed from the office before the expiration of his office if the company passes an ordinary solution at the general meeting which is considered by shareholders in general meeting. The procedures of the removal of a director under S157B are as follows, 1) the company receives a notice of a resolution to remove a director 2) the company sends a copy of the notice to the director concerned 3) the director concerned shall be entitled to be heard on the resolution in the meeting 4) the director concerned needs to make a written representations to the company 5) a copy of the representations is sent to every member whom notice of the meeting is sent. The notice of resolution is usually accompanied with the copy of the representation 6) the director may require to read out the representations at the meeting if the copies of representations are not circulated properly

(ii)Yes, it is possible to remove John from the office of director. First, John purchased 200 air-conditioners from Hitachi Limited at a price of $800,000 without approval of General Meeting. In this case, directors are authorized to enter into a contract up to maximum of $500,000 without approval of general meeting, prior approval of General Meeting has to be obtained if the value of any contract exceeds $500,000. In this case, John has violated the authorization, that means he has violated the law, but the possibility of removing John should depend on The Article of Association. Second, John purchased those air-conditioners at a price of $800,000 but the market price was $300,000 only. By considering the duties of directors, directors should have a fiduciary duty which states that a director must act in good faith in what he believes to be in the best interests of the company. It is a subjective test decided by the director and the court will not interfere except the director has not acted honestly. Obviously, in this case, John bought those air-conditioners at a price that...
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