Alberto, Malte and Freda are the directors ofAction Productions Ltd (AP). AP is a talent agency that provides actors for film and television productions. It aims to list on the Australian Securities Exchange (ASX) in August 2024. AP has some international success over the past year as one of its actors was cast for five films as the new James Bond. Another of its actors has recently been voted the "World's Hottest Actor" by the readers of a leading magazine and AP has been flooded with film offers for him. As a result, the company has been making enormous profits.

Alberto has been busy producing a disclosure document to lodge with ASIC in preparation for the company's listing on the ASX. He hopes that the company can raise $19 million through the sale of shares to the public on the ASX. He is very confident that AP's actors will continue to receive plenty of work in the future so he decides to include a few sentences stating that AP's actors will continue to be the film industry's most profitable actors for years to come. Malte and Freda glance over the document that Alberto has prepared, and they tell him that they are happy with its contents. Alberto, Malte and Freda proceed to sign the Directors' Declaration attesting that the contents of the document are true and correct.

Once the document has been approved by the Australian Securities & Investment Commission (ASIC), the directors are given permission to release it to the public. The issuing of the shares to the public is very popular because they public are so impressed about the current and future success of the company's actors. All of the shares are sold out very quickly.

Unfortunately, after all of the shares are sold, the actor cast as James Bond is arrested for large-scale tax evasion and subsequently sacked from the role. AP is unable to get him any future work. Other actors represented by AP tell the media that it owes them millions in unpaid entitlements. As a result of all of these events, the company's share price immediately plummets and all of the company's investors are furious. AP's directors later admit that after they signed Directors' Declaration in the disclosure document, they found out that the actor was going to be arrested for tax evasion, but they kept quiet about it because they did not think that it would be relevant.

Please answer the following question using IRAC and the law to support your arguments:

What type of Disclosure Document do the directors need to produce for AP's share issue and what are its required contents? Are there any problems with the contents of the document and if so, what are the possible penalties for the directors?

Explain using the law to support your arguments. (12 Marks)