40 MARKS - United Kingdom:

Frank and Teresa are minority shareholders in XYZ Ltd.

They are unhappy with Pedro and Jonson, the majority shareholders and directors of the company. They feel that the company's affairs are not being handled as they should be, and they are concerned that property belonging to the company is being sold at what they consider to be an undervalue.

One of the transactions involves a company called ABC Ltd. Frank and Teresa have recently found out that Pedro and Jonson both have substantial shareholding in ABC Ltd. At a company meeting, the company approved the transaction with ABC Ltd as Pedro and Jonson voted in favour of the transaction although the minority shareholders voted against it.

Pedro and Jonson have also awarded themselves large pay increases even though the company is making marginal profits.

Advise Frank and Teresa on their statutory rights, if any, as minority shareholders in respect of the above grievances. Do not discuss directors' duties.