Case summary: Co-founders of a med-tech company failed to seek court’s leave to commence a statutory derivative action under s 216A of the Companies Act against two directors appointed by the majority shareholder for allegedly not sufficiently protecting the company’s key product’s software source code and algorithm.
The directors successfully argued that the co-founders brought the application for collateral purposes – retaliation for their removal as directors of the company and an attempt to wrest back control over the company.