Parker v McKenna (1874âÂÂ75) LR 10 Ch App 96 is a UK company law case, concerning the rule against having any conflict of interest.
Mr McKenna was one of four directors of the National Bank of Ireland, a joint stock bank. In 1864 resolutions were passed to increase the capital by issuing 20,000 ã50 shares. They were to be offered to old shareholders first according to how many they already held, for a ã25 premium and ã5 as a first call. Any not bought would be sold by directors at a ã30 premium. The directors allotted 9778 shares to a Mr Stock, who paid only ã5 a share. It was arranged that the certificates would be withheld, the bank had a lien on the shares for the premiums and no transfer could be made till ã30 was paid up. He then said he could not take so many and asked the directors to relieve him. They took many at ã30 a share, and then sold them on at a profit. The ã30 per share was always paid to the bank.
Lord Cairns LC, Sir WM James LJ and Sir G Mellish LJ held that the directors had to account for all profits made through the sale of the shares.
James LJ made this famous statement: