Reference no: EM132649989

Candle Ltd (the "Company") is a private limited company incorporated in Hong Kong in April 2018. The Company's 3,000 issued and fully paid shares are equally divided among six persons, namely, Albert, Benny, Carmen, David, Edith and Felix.

The minimum number of directors stipulated in the Company's articles of association is three. The board of directors currently comprises four directors, namely, Albert, Benny, David and Felix. Board meetings are usually held on a quarterly basis. David has not attended any board meeting since June 2020. Albert occasionally shows Benny some of the Company's financial statements. Benny does not understand the financial statements and simply signs whatever Albert asks him to sign. Hence, Albert, Benny and Felix have made many board decisions in the absence of David.

When Edith became aware of David's absence, she asked Albert in a telephone conversation to terminate David's directorship immediately. However, Albert ignored Edith's request because she is neither a director nor a controlling shareholder.

After finding out about Edith's request, Benny has considered the matter seriously and wants to remove David from the board immediately. Benny therefore wrote a letter to the Company's board on 2 October 2020 requesting the board to remove David as a director and alter the number 1 of directors in the Company's articles of association from three to two, both effective from 9 October 2020.

Required:

(You are NOT required to include in your answer the procedure for removal of a director or the procedure for alternation of the articles of association)

Explain the validity of each of the above decisions and actions.

(Tutor: You may write the answer without specifying the relevant law / article)