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SCENARIO: BioHeal Pharmaceuticals Ltd is developing a new vaccine. David is a director of BioHeal. During a board meeting, David learns that a rival company is selling a patent that would perfectly complement BioHeal's research. BioHeal's board decides they cannot afford the patent. David secretly buys the patent himself through his own side business and later licenses it to other companies for a massive profit.
Which statutory duty under the Companies Act 2006 has David most clearly breached?
ACCA · Question 56 · Corporate and Business Law
SCENARIO: BioHeal Pharmaceuticals Ltd is developing a new vaccine. David is a director of BioHeal. During a board meeting, David learns that a rival company is selling a patent that would perfectly complement BioHeal's research. BioHeal's board decides they cannot afford the patent. David secretly buys the patent himself through his own side business and later licenses it to other companies for a massive profit.
Could David have legally pursued this opportunity without breaching his duties?
SCENARIO: BioHeal Pharmaceuticals Ltd is developing a new vaccine. David is a director of BioHeal. During a board meeting, David learns that a rival company is selling a patent that would perfectly complement BioHeal's research. BioHeal's board decides they cannot afford the patent. David secretly buys the patent himself through his own side business and later licenses it to other companies for a massive profit.
Could David have legally pursued this opportunity without breaching his duties?
Answer options:
No, directors are strictly forbidden from ever having outside business interests.
Yes, because the board had already rejected the opportunity.
Yes, if he had fully disclosed it and obtained authorization from the independent directors.
Yes, because he used his own money to buy the patent.
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