Zafar is a partner of the firm Elixir Traders, which has been supplying cotton to textile manufacturers for the past decade. Last month, a casual vacancy occurred on the board of directors (‘Board’) of Fine Textile Limited (‘FTL’) a public unlisted company. Zafar, who has been well-known to the other members of the Board, was appointed to fill the vacancy. Last week, during a meeting of the Board (‘Board Meeting’), the matter of purchasing cotton from Elixir Traders was discussed. The Board resolved to purchase cotton from Elixir Traders. Zafar voted in favour of the resolution. Now, a shareholder of FTL has objected that Zafar has unlawfully influenced the matter to benefit his own firm and that he should not have been present at the Board Meeting.Required:Under the Companies Ordinance, 1984, advise Zafar on the validity of the shareholder’s objections, and the consequences for Zafar of the proceedings at the Board Meeting. (10 marks)
