Reference no: EM133479398

Problem: ABC insurance Co Ltd is a huge insurance company which has grown substantially, in great part becuse of acquiring smaller insurance companies, and also employing some of the managers of those smaller companies. Jim was a director of one of the smaller companies which has been absorbed into the larger company, and he is given a position as Chief financial officer in the larger company. Jim uses his office to organize loans from company funds to purchase some business interests he personally owns. Jim transfers a company car to his wife, who purchases the three-months-old car for $100. Jim, also being aware that the company is about to purchase two more smaller companies, secretly tells his family members to buy shares in the target companies since he knows the price will go up before the takeover occurs. An auditor doing a routine check of the company alerts the board to the various transactions undertaken by Jim.

Task: Explain whether Jim has done anything wrong, and whether the board should take any action. Discuss with reference to relevant cases, legislation and legal principles.