Elon, Yuki and Carson are the directors of Ally Hardware Co. Ltd. Elon is the managing director. Carson is husband of Yuki. Yuki has been asked by Elon to buy 500 printers for Ally Hardware Co. Ltd. Unknown to the other directors, Yuki runs her own company that sells printers and she gave the Ally Hardware Co. Ltd. expensive contract to it. Yuki did not mention this to the other directors of Ally Hardware Co. Ltd. and she earned secret personal profit HK$200,000. Carson is busy with his job as an airline pilot and has failed to attend any directors’ meetings for the last two years. He told Elon and Yuki that he is happy to agree with whatever decisions they make with regard to the business. Three months ago, Carson forgot to renew the insurance over the company’s premises. Last week, there was a fire which destroyed the company premises and the company suffered HK$300,000 property loss without insurance compensation cover. Carson received huge directors' fees (HK$100,000) each month. Explain whether Yuki and Carson breached the director's duties.

Answer rating: 100% (QA)

Y uki breached her duty of care and skill by giving the contract to her own company without disclosing her conflict of interest to the other directors ... View the full answer