ISSUE:
Whether the share allocation was a legitimate act?
Whether the directors of the corporation have a duty to the shareholders?
RULE:
Sections 166(1) through 166(6) of the new Companies Act codify the duties of directors, and since Section 166(7) stipulates consequences for violations, it has elevated the level of accountability because the duty is now both a fiduciary duty and a statutory duty. The shareholder may file a claim under Section 241 for unfair treatment and poor management as well as under Section 166(2), which requires the director to act with good faith and a legitimate purpose in order to avoid violating his statutory obligations as the company's director.