Mr. Malik, an investment counsellor by training, sat on the board of directors of Talbot Enterprises Ltd., a broadly held corporation. During a meeting of the board, he advised the corporation to buy some condominiums given the present soft real estate market. Malik did not disclose that he owned shares in the corporation that owned the properties, nor did he disclose that he would be entitled to a commission for every unit he helped sell. When the question was put to the board, he voted in favour of it. Read each of the following statements separately, and indicate which is true.
◦ Malik has breached his fiduciary duty, but if the sale was fair, he need not give up his profits.
◦ Malik must account for any profit made because he failed to disclose his interest and voted on the question.
◦ A shareholder, learning of his actions, could proceed under the dissent procedure, which would cause the corporation to buy his shares at fair market value.
◦ Malik doesn't have to disclose his interest in the contract if he has signed an agreement with the other directors relieving them of their fiduciary duties.
◦ A director must disclose his interest in a contract before the board, but is not required to refrain from voting for it.
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