Director's duties: Shareholders interest a proxy of company's best interests? Not always, depending on its solvency

15 Apr 2024

In Foo Kian Beng v OP3 International Pte Ltd (In liquidation) [2024] SGCA 10, the Singapore Court of Appeal dismissed the Appellant’s appeal against the findings by the Judge of the General Division of the High Court of Singapore that a director has a duty to consider the interests of creditors as part of his duty to act in the best interests of the company at a time when the company was in a financially parlous state, and that Foo Kian Beng had breached that duty by authorising the payment of disputed transactions to himself.

In this legal update, Director Chan Wei Meng analyses Singapore’s landmark decision to provide guidance and clarity on the nature, scope and content of a director’s duty to consider the interests of creditors as part of its duty to act in the best interests of the company. The Singapore Court of Appeal expanded on the UK Supreme Court’s landmark judgment in BTI 2014 LLC v Sequana SA and others [2022] UKSC 25 which affirmed that the director’s duty to act in the best interests of the company may, in certain circumstances, enjoin a director to have regard to the interests of creditors.

Please click here to read the update.