Mr. A is the sole shareholder of X Ltd., and is also a director of Y Ltd. Y Ltd. is negotiating to buy property from X Ltd. Which of the following is false?
A) Failure to disclose his interest will make Mr. A liable to Y Ltd. for any profits he makes on the transaction and for any losses suffered by Y Ltd.
B) So long as Mr. A discloses his position to the board of directors of Y Ltd., he can vote in favour of the contract at the directors' meeting.
C) Mr. A does not owe a fiduciary duty to X Ltd. or to his fellow X Ltd. shareholders.
D) To protect himself, Mr. A must disclose his interest to the other directors and refrain from voting or influencing the decision.
E) Mr. A has a duty to act in the best interests of Y Ltd., and to avoid any conflict of interest.

Question

Quizplus · Accepted Answer

Mr. A cannot vote in favour of the contract at the directors' meeting of Y Ltd. even if he discloses his interest, as it would still be a conflict of interest.

Mr a Is the Sole Shareholder of X Ltd