Problem solving question on corporation law:
Transparent Corporate Governance Pty Co Ltd (TCG), a consulting ,has a board which includes C and D. The company has deleted Replacement Rule s.194,following some earlier turbulence.
At the initiation of board members C and D ,on the incorporation of TCG ,the company had purchase extensive corporate governance training materials from C and D .These materials have never been used by TCG as such, since they aimed at directors of ASX- Listed companies , and TCG did not have any ASX- Listed public companies as clients. C and D informed the board that since their training packages had not been utilised by TCG, they were prepared to buy them beck from the company, at the price for which they had sold them.
When the matter was discussed by the board of TCG, C and D absent themselves and did not vote on the matter . The TCG board voted to accept the offer form C and D.
C and D had previously explained to the TCG board that they wanted to start another company , which focussed upon ASX-Listed Companies internal audit functions. They did not mention the fact to the TCG board ,or its shareholders subsequently ,that several such ASX-Listed Companies had approached them. They were approached because they were personally well - known as the gifted innovators of other interactive corporate governance training materials ,such as they were able to purchase back from TCG.
When these facts came to light one board member remarked about C and D: " I think we should inform ASIC about these guys ".
Discuss this proposal and its possible outcomes.