1. Seven Dwarves Pty Ltd operates nursing homes. Its directors in 2018 were Grumpy and Dopey. The directors decided to sell, without consulting shareholders, a large block of land near UPNG K1 million. The directors believed that the land was surplus to the requirements of Seven Dwarves Pty Ltd. The directors decided, on the advice of stockbrokers, that it was better to re-invest the money in high-growth banking and finance shares technology shares. The K1 million was invested in banking shares that had invested in financial derivatives. By 2019 the shares were worthless. In contrast the land i was worth K3 million. Seven Dwarves Pty Ltd has new directors, Doc and Happy.

A) What rights does the company have against Grumpy and Dopey?(5 Marks)

B)Discuss briefly the Rights and Powers attaching to Shares.(5 Marks)

2. Regal Cinemas is a Pty Ltd Co. controlled by a Board of 4 directors, Roger, Conrad, Judyann andRobert. They see a good opportunity to expand their cinema business by buying two more cinemas. The Co does not have sufficient funds so they agree to each put in some of their own money. The purchase goes ahead and they each receive shares in the new business. A buyer comes along who wants to buy everything which pushes up the value of their shares and they accept the takeover offer. They all make a personal profit on their shares although Judyann put her shares into a trust fund on behalf of the Co.

The new Board wants to take action against the old directors for breach of their duties.

Is thisaction will prosper?

A. Under What Circumstances, the Persons are prohibited from Managing Companies?

(5 Marks)