Question: Ben and Jerry started Choice Pte Ltd (Choice), a business consultancy company, immediately after graduating from school. They were both directors of Choice, and each

Ben and Jerry started Choice Pte Ltd ("Choice"), a business consultancy company, immediately after graduating from school. They were both directors of Choice, and each owned 50% of the shares in the company. Choice was a success initially, growing from a two-man show to a proud Singapore enterprise employing 10 local employees over a short period of time. However, with the recent pandemic, business opportunities started drying up and Choice was seriously considering retrenching some staff. Upon hearing of their plight, a close friend of Ben and Jerry introduced them to Ray, a retired veteran of the consulting industry. Ray was of the view that Choice still had bright prospects because of its recent track record. He promised that he could bring in at least $500,000 worth of contracts annually but only if he became a director and shareholder of Choice so that he had some standing to market the business. In return, Ray was promised a commission for projects that he brought in. Ben and Jerry each sold 10% of their shares in Choice to Ray, so that each of them held 40% and Ray held 20% of the shares in Choice. Ray was also appointed as a director of Choice. Ben and Jerry told Ray that they would hold him to his promise to procure $500,000 of business projects each year, failing which Ray was to return the shares to them and resign as a director. Ray started well with his introducer work, but his stream of projects soon petered out. Meanwhile, on the strength of Ben and Jerry's own hard work and determination, Choice's business started turning around. Frustrated that they must now share the fruits of their success with Ray, Ben and Jerry demanded that Ray sell his shares back to them since his targets had not been met. Ray denied that there was an agreement to return the shares. Ben and Jerry then held an extraordinary general meeting of Choice, where they voted as shareholders to remove Ray as a director, one and a half years after he was appointed. Ray was upset as he thought he was removed as a director so soon and he was deprived of the chance to earn commissions from the projects that he would introduce. Ray later found out that Ben and Jerry formed another company JB Pte Ltd ("JB") (of which they were the sole directors and shareholders), which carries out the same business as Choice and is now dealing with the customers of Choice. Ray believes that Choice's business had been diverted to JB since he did not return his shares in Choice to them. When confronted by Ray, Ben and Jerry tried to justify that the formation of JB provides an alternative option with a different team and reduces the revenue of Choice so that the latter does not have to register for Goods and Services Tax ("GST"), thereby saving Choice's customers GST. Ray has come to you for advice on the following matters: Discuss whether Ben and Jerry had breached their directors' duties to Choice. Explain whether Ray may successfully take an action against Ben and Jerry for minority oppression.

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