Singapore: Financial Assistance and Directors' Duties

Abstract

Rules to preserve corporate assets are a necessary by‐product of limited liability, as well as a means of limiting agency costs arising from the separation of ownership and control. Hence, it is axiomatic that the directors of a company are required to act bona fide in the best interests of the company; Re Smith & Fawcett. The weakness of the common law duty is that courts are reluctant to substitute the business judgments of the controllers with their own. According to Lord Wilberforce, in Howar d Smith v Ampol Petroleum:

Citation

Tjio, H. (1996), "Singapore: Financial Assistance and Directors' Duties", Journal of Financial Crime, Vol. 3 No. 3, pp. 307-310. https://doi.org/10.1108/eb025730