|
|
| |
|
| |
|
Essays on Corporate Strategy
|
|
|
| |
| AUS Ltd (AUS) and NAN Ltd (NAN) are finance companies. Brown was the managing director of AUS and Peter was the managing director of NAN.
In July 2002 AUS and NAN entered into a joint venture agreement. Under the agreement AUS and NAN agreed to form a publicly listed company called FIN Ltd (FIN) which would make investments in businesses introduced to it by the joint venturers. The prospectus issued by AUS and NAN contained a statement about FIN’s commitment to purchase a 70% shareholding in Silver Mines NL (SM) from AUS for a purchase price of $900,000.
Soon after its incorporation, FIN purchased from AUS the 70% shareholding in SM
for $900,000 as stated in its prospectus. However, in the prospectus, there was no mention of:
(a) the liquidity problems that had plagued SM over the previous months, or the downsizing of staff;
(b) the fact that the vendor (AUS) had acquired the shares in SM for a consideration of $200,000 less than three months before selling them to the purchaser (FIN); and
(c) the $50,000 fee received from the sale by a stock broking firm owned by Brown and Peter.
In December 2002, SM went into liquidation.
Advise FIN:
(a) whether AUS and NAN breached any duties under the general law and the Corporations Act 2001 (Cth);
(b) what remedy, if any, FIN may obtain against AUS and NAN, including their directors, under the general law and the Corporations Act 2001 (Cth). |
7159 words
|
|
|
|
| |
|
|
