Andrew is a member of the board of directors of AP Limited. On Andrew’s insistence, six months ago AP Limited terminated a contract with BB Limited which provided IT support to AP Limited; two weeks later, AP Limited engaged ZZ Limited to provide IT support services to AP Limited. Andrew did not inform the board of directors of AP Limited that his girlfriend owned 40% of the shares of ZZ Limited and is a director of the same company; in fact he actively participated at the board of directors meeting at which it was decided that the contract for IT support services be awarded to ZZ Limited. Two months ago Andrew was appointed a member of the board of directors of ZZ Limited and he did not inform the board of directors of AP Limited of this fact. The board of directors of AP Limited has recently become aware of all these facts and come to you for advice.Required:
(b) Explain what action may be taken against Andrew for his failure to make the necessary disclosures to the board of directors. (2 marks)