It is generally assumed that English directors have acarte blancheprivilege to engage at arm's length in transactions involving securities of a corporation which they manage. Thus directors of English corporations may utilize inside information for their personal benefit at the expense of their trading partners. This assumption is derived from the calamitous decision ofPercivalv.Wrightwhich, subject to illusory limitations imposed byAllenv.Hyatt, is still believed to be the law in England today. Israeli directors, it is believed, share thiscarte blancheprivilege with their English counterparts. This belief derives from the fact that Israeli courts resort to English jurisprudence, when necessary to fill in the gaps which are found to exist in Israeli law.This paper questions the validity of the above assumptions. It is an attempt to evaluate whether or not an English or Israeli director, or another insider, may indeed utilize inside information to trade in the securities of his corporation without regard to rules governing fiduciary relationships and other legal principles, which, it is submitted, the English judiciary and bar have thus far overlooked.
In order to determine what major developments have taken place in tax law in Israel over the last 40 years, it is first necessary to formulate criteria with which to estimate the importance or centrality of changes in tax legislation. The emphasis here is on legal developments (in legislation and case law) rather than on changes in the tax system and tax policy. In the field of taxation, legal, economic and social questions are, however, interlinked; and it is moreover, a legal tool — legislation — that determines the tax system and its composition of various tax bases.
During periods of rismg prices, contracts for future delivery of merchandise are usually linked to a price index to protect suppliers from future cost increases, and customers, therefore, advance payments to avoid the price linkage. Suppliers are then faced with two problems: (i) the investment of advance payments and (ii) the presentation of the investment outcome in the fimancial reports. This paper uses a portfolio selection process to analyse the suppliers' investment decisions, and shows that the accounting presentation depends on the particular investment decision, which in turn affects the principalagent relationship. Suggestions are made to eliminate the undesirable effects of this relationap on management's decision making.
Two recent English cases bring to the fore the difficulties that controlling shareholders face when they wish to remove incumbent directors. In the case of Bushell v. Faith, 1 the director involved took refuge in an article of association which weighted the voting power of directors for the sole purpose of defeating a removal resolution. Although he held only one third of the outstanding shares, he was able to outvote the controlling shareholders and remain in the saddle. The House of Lords decided that the article in question did not run foul of sec. 184(1) of the 1948 Companies Act, 2 which invalidates articles requiring more than a simple resolution for removal of directors.The rationale of the Court of Appeal and of the House of Lords was that as long as multiple and restricted voting rights are generally recognized, no different rule can apply to voting rights weighted specifically for blocking a removal resolution. Only Lord Morris of Borth-Y-Gest endorsed the reasoning of Ungoed-Thomas J. at first instance (not reported) who held that the purpose of the article in question was to make a director irremovable and that it was tantamount to a requirement that more than a simple majority be necessary for removal. 3
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