Directors must exercise their powers for proper purposes; an allotment of shares designed primarily to frustrate a takeover bid constitutes an improper exercise of power.
Company and Partnership
Directors' exercise of power to issue restriction notices is vitiated if the predominant purpose is improper, applying the proper purpose doctrine to board powers.
A director's fraud cannot be attributed to the company so as to enable the wrongdoer to invoke the illegality defence against the company's own claims.
The corporate veil may only be pierced where a person under an existing legal obligation deliberately interposes a company to evade it; the concealment principle is distinct and does not pierce the veil.
Get a detailed analysis of Howard Smith Ltd v Ampol Petroleum Ltd and how it applies to your situation.
Explain Howard Smith Ltd v Ampol Petro...