Disclosing Conflicts of Interests: Dayco Products Singapore Pte Ltd v Ong Cheng Aik [2004] 4 SLR 318

• Main Author: KOH, Pearlie
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2005
• Subjects: Asian Studies; Business Organizations Law; Legal Ethics and Professional Responsibility
• Online Access: https://ink.library.smu.edu.sg/sol_research/749
• Institution: Singapore Management University

Directors are subject to strict fiduciary obligations to avoid a conflict of interests. This obligation, however, does not mean that a corporate director can never contract with the company on whose board he sits, an obvious example of a situation of conflict. The general law requirement is that the fully informed consent of the company’s shareholders, obtained in advance, will remove the conflict and prevent a breach from arising. In addition, s 156 of the Companies Act requires, on pain of penal sanctions, disclosure of the conflict to the board of directors. This case raises questions in connection with the director’s obligation to disclose, both under general law and under the Act.