Electrical Products Pte Ltd ('Elecco') is a small private company almost wholly owned by the Singh family. A and his wife, a daughter and two sons B and C, together own all of the ordinary shares of Elecco. A small issue of non-voting, cumulative preference shares are held by D and E, two long time employees of Elecco.
A, B and C, - the 'men of the family' - are the three directors of Elecco. A acts as the managing director although neither he nor anyone else has ever been formally appointed to this position. B and C willingly accept A acting as managing director. A after all is their father and it was he who founded the company.
Elecco regularly pays dividends on its preference shares but only occasional small dividends on its ordinary shares. Most cash is taken out of the company by means of large salary payments to the executive directors A, B and C.
Elecco operates four stores selling machines and electrical parts. B, C, D and E each manage one store, while A oversees the entire operation.
October 2019: A is approached by X, agent for Aso, a manufacturer of top quality Japanese electrical products. X enquires whether A is interested in acquiring the exclusive retailing rights for Aso products for Fiji. A informs B and C of X's enquiry. At a discussion over dinner A, B and C decide: first the opportunity to retail Aso products is too good to miss: second, the Aso products can't be marketed through the existing Elecco stores since this will only undermine the established market for Elecco's present range of products: third, A should negotiate further with X.
December 2019: An exclusive retailing agreement is reached between X on behalf of Aso and New Co Pte Ltd ('Newco'), a newly incorporated private company owned by A, B, C, the wife and the daughter.
Newco acquires several stores which it stocks with Aso products. The Newco stores prove to be highly successful, so successful in fact, that the Singh family decides it should dispose of its interest in Elecco and concentrate all its energies on Newco.
April 2020: Negotiations are entered into between A on behalf of himself and other family members on the one side, and D and E on the other side, for the purchase and sale of Elecco's ordinary shares. Eventually D and E acquire all the issued ordinary shares in Elecco.
November 2020: D and E are very disappointed with the performance of Elecco. It seems old customers have deserted the Elecco stores in favour of the new stores operated by Newco. These customers say they simply prefer the Aso products stocked by Newco.
D and E now consult you. On the one hand they don't feel wronged, since the Singh's sold their shares for a fair price and did not hide their interest in Newco and Newco's exclusive marketing deal with Aso. D and E were fully aware of the Singh's interest in Newco. But on the other hand, D and F also feel that they are somehow victims of the Singh's business dealings.
Advise D and E if they, or anyone else may have any legal claims against the Singh family or any member thereof. Give reasons for your answer.