Originally Posted by
1A_Please
There is also the issue of the directors' duty of care to the shareholders. Directors cannot deliberately pursue a strategy that worsens the wealth of the shareholders and, if found to be acting against their fiduciary duties, they can be personally liable for losses. I would imagine class action lawyers are already paying careful attention to the behaviour of ZL's directors and may look to launch an action if the losses continue.
True but the good faith and best interest obligations on Directors are notoriously low bars to clear. And bear in mind that Rex's majority shareholding sits in the hands of half a dozen people headed by Lim. It would not be difficult to manufacture majority shareholder approval for any strategy that they want to run. Moreover, price point competition is a legitimate 'break in' tactic despite the overpowering whiff of desperation associated with this effort.