Case Study Cheap Pharma

Decent Essays
I – Immediate Issues or Problems: Cheap Pharma Inc., a pharmaceutical company specializing in generic drugs, had been suffering low sales in the past months because of fierce competition from other generic drug brands. II – Basic Issues or Associated Issues: Mr. De Guzman member of the board of directors of Cheap Pharma Inc. and two others was looking for other ways to make profit by improving the company’s product line. They proposes to buy shares of stocks of Green Med , an insolvent pharmaceutical company whose claims to fame is its innovative use of lagundi leaves in its cough syruo. According to Mr. De Guzman, Cheap Pharma Inc. can make use of GreenMeds’s patents and develop new products which incorporate traditional herbals medicine with Cheap Pharma’s existing product line. However, before Cheap…show more content…
It is the company itself which can take enforcement action against a director if there has been a breach of duty. The decision to start proceedings against a director would be made by the board or, in an insolvency situation, a liquidator. In certain circumstances and subject to certain hurdles, an individual shareholder or group of shareholders can also bring a claim against a director for breach of duty on behalf of the company (known as a derivative action). Obligations are also imposed on you as a director from other sources beyond the main companies legislation. Some examples are: • A director owes a duty of confidentiality to his or her company and must use or disclose the company’s confidential information only for the benefit of the company. • Directors are responsible for ensuring that the company complies with its obligations relating to the health, safety and welfare at work of its workers, under health and safety legislation. • Similarly, obligations arise under environmental legislation and anti-corruption
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