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(Answered)-Aussie mines ltd has decided to expand despite recent financial


Aussie mines ltd has decided to expand despite recent financial difficulties


Company Law Individual Assignment ? Semester 1 2016

 

Aussies Mines Ltd has decided to expand, despite recent financial

 

difficulties. The board of directors decides to issue $5million worth of

 

shares in the company to fund the expansion. The following share issues

 

are proposed:

 

(a) $1 million dollars worth of shares will be offered to one large

 

institutional investor

 

(b) $1 million dollars worth of shares will be offered to company

 

employees

 

(c) the balance of $3 million dollars worth of shares will be available for

 

purchase through the Australian Stock Exchange.

 

Part A

 

Five months after Sarah purchased $20,000 shares in the company, she

 

discovers that the information she based her decision to invest upon was

 

incorrect. She based her decision to purchase shares on the company's

 

previous year's profit figures. However the auditor made an error in the

 

preparation of these figures for the company and the profit was

 

overstated by 50%. She comes to you for advise. Advise Sarah whether

 

she can collect damages from the company and/or the auditor.

 

Part B

 

Will is a minority shareholder of Aussie Mines Ltd. He comes to you and

 

complains that the directors have sold company assets and have used the

 

proceeds from the sale to purchase an island resort in their own names.

 

He also tells you that the directors are the controlling shareholders of the

 

company and they have ratified their own acts at a recent general

 

meeting. Advise Will, who wants to initiate an action against the directors.

 

Word Limit: 1000 words

 

Due: Week 9

 

Weight: 30%

 


 

Guide

 

These questions outline a problem fact situation. You are then given the

 

areas of law which you need to discuss in your responses to these

 

questions. However, you need to identify the issues in these problem fact

 

situations and discuss the particular legal principles within the relevant

 

areas of law which apply to the issues you have identified. You would need

 

to use the following structure in your response:

 

1. Identify the issue/s

 

2. State the relevant statute/case law

 


 

3. Apply to the facts

 

4. Come to a conclusion

 


 

 


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