Question

1. Helen and Rob are directors of Archers PLC, a company whose shares are traded on the stock market.

1. Rob thinks that Helen was not properly appointed as a director, and wants to know what action he can take to challenge her appointment.
2. Helen has identified payments made by an agent of the company to the personal bank account of a director of a business they supply.  When asked about the payments the agent gave Helen a large sum of cash that he said was a refund on the payments. Helen wants to know if there could be any legal consequences for the company over the payments, and whether she should pay the cash into the company bank account.
3. Rob hears that because of bad weather in South America the product the company supplies is going to be in high demand, and so the company profits should rise. He buys more shares in Archers PLC expecting the share price to rise, and advises a friend to do the same. Has Rob or the friend done anything wrong?
4. Helen has negotiated a contract for the company that she thinks will be very good for the business, but the shareholders have rejected it. Helen wants to know if she can take the contract herself.
5. Because of difficulty in supply of chemicals  a scientist working for the company has changed the formula for one of the company’s products without telling anyone. This means the product does not match the description given on the label, which is a criminal offence. Rob wants to know whether the company has committed a crime. Would it matter if Rob or Helen was the scientist involved?

Answer 1

Case Study	Response
a. Rob thinks that Helen was not properly appointed as a director, and wants to know what action he can take to challenge her appointment.	The appointment / removal is in the hands of the Shareholders. If the Rob thinks that helen is not properly appointed as a director. Robs need to be disclose the reson for grounds of disqualification for the same, age is barrier etc. Helen is also responsible to disclose the grounds if any where he is seems to be disqualified.
b. Helen has identified payments made by an agent of the company to the personal bank account of a director of a business they supply.  When asked about the payments the agent gave Helen a large sum of cash that he said was a refund on the payments. Helen wants to know if there could be any legal consequences for the company over the payments, and whether she should pay the cash into the company bank account.	Related party transactions, need to be disclosed propely sam eneed not be unlawful or not meant for personal benefits as it leads to fraudulent activity and may cause whistle blowing. Here payment to directors will be treated as loan only as same is directly paid to directors account. Secondly the payment needs to be transfered to company bank account , such payment need to be appropriately accounted in books and disclosure for the same should be marked.
c. Rob hears that because of bad weather in South America the product the company supplies is going to be in high demand, and so the company profits should rise. He buys more shares in Archers PLC expecting the share price to rise, and advises a friend to do the same. Has Rob or the friend done anything wrong?	Acting on insider trading is not tenable in law and amount as offence.Insider information passing and incites friends and other related parties to purchase or sale or any transaction based on such information is not tenable in law. Here Rob is not entitled to pass on the information as well as on the same fact entitled by himself to do the same.
d. Helen has negotiated a contract for the company that she thinks will be very good for the business, but the shareholders have rejected it. Helen wants to know if she can take the contract herself.	Helen cannot take up the contract on sole basis. Change in the product mix is the decision of the persons running the business, as per the situation herewith, shareholders entitled with the returns as well as best utiisation of the funds invested by them in the organisation. As helen is the only person entrusted with the contract, whereas other shareholders has rejected the contract, Accordingly helen can never move forward with the contract by opposing the decision of the shareholders.
e. Because of difficulty in supply of chemicals  a scientist working for the company has changed the formula for one of the company’s products without telling anyone. This means the product does not match the description given on the label, which is a criminal offence. Rob wants to know whether the company has committed a crime. Would it matter if Rob or Helen was the scientist involved?	Even Rob and Helen are scientist sam eshall be held liable for non adherence of laws. Yes, as per laws and regulation same is seemed to be crime if the product is being launched in the market without exhibitings the components of the product used in manufacturing of the product. Yes, Same will be applicable if either of them are scientist because any formulae need to eb tested then evaliated then launched in the market but as a regulations, labell should exhibits the componenets of the product. Hence it is stated that company and officer in charge shall be held liable irrespective of the fact that officer in charge is scientist itself.