NKF 1 - Why was Durai sued?

TT Durai, well-known National Kidney Foundation (NKF) head was sued for breaches of director's duties. The interesting thing about the whole matter was that he was not even a director.

However, under the Companies Act, section 4, the definition of a director reads as a " 'director' includes any person occupying the position of director of a corporation by whatever name called and includes a person in accordance with whose directions or instructions the directors of a corporation are accustomed to act and an alternate or substitute director."

This type of person is normally referred to as a shadow director or a de factor director - one who on the facts, has the powers of a director. A person found to be a de facto director is also subject to provisions relating to directors duties under the Companies Act.