James was the Chief Executive Officer and Managing Director

James was the Chief Executive Officer and Managing Director of Tramp Bank Bhd. He has a reputation for being an enigmatic, forceful and dynamic leader among those in the corporate banking world. James was instrumental in the bank acquiring shares in Long-life Sdn Bhd, a life assurance company and was directly involved in all meetings that deliberated this purchase. The purchase price for the transaction was unusually large for the bank but it appears that there was an evaluation of the transaction and the price was deemed to be a fair representation of the value of Longlife.

However, it has now been revealed that the acquisition of Long-life was for an amount substantially in excess of Lon life’s true value. It has also been established that the company appointed to conduct the evaluation was one that belonged to James’ wife, Eunice.

The bank has also discovered that James also knew that the sale proceeds obtained by Long-life Sdn Bhd would be used by Long-life to repay a loan to Bidin Sdn Bhd, a company of which James was the director and in which he and his family held a number of shares.

Meanwhile, Dennis, a minority shareholder in Tramp Bank has found himself being left out of many key decisions and is kept in the dark about any future plans. The majority shareholders have been convinced by James that they should not allow Dennis to sell his shares. Dennis has also asked if the majority shareholders would like to buy him out, but this too has been rejected.

1. Discuss James’ liability, if any, and if there are any defenses that he may rely on and; 
2. Advise Dennis as to the best course of action considering his minority shareholding