Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Aloe-Well (Pty) Ltd ('Aloe-Well') is a company that distributes Aloe Vera sports supplements. Aloe-Well has been a successful company, generating profits and declaring dividends in

Aloe-Well (Pty) Ltd ('Aloe-Well') is a company that distributes Aloe Vera sports supplements. Aloe-Well has been a successful company, generating profits and declaring dividends in accordance with the terms 4 stipulated in the company's memorandum of incorporation. In the beginning of December 2021, the directors of Aloe-Well issued a media statement, stating that the share price of the company had collapsed. According to the media statement, the collapse of the share price is due to accounting irregularities. Furthermore, it was discovered during forensic investigations that the financial statements of Aloe-Well were 'false, falsified, misleading, incomplete, and failed to reflect an accurate picture of the company's financial state'. The shareholders of Aloe-Well, most of whom lost a significant portion of their investment in Aloe-Well, approach you to initiate proceedings in terms of section 218(2) of the Companies Act 71 of 2008. The purpose of the proceedings is to launch a claim against the directors of Aloe-Well, for pure economic loss as a result of a reduction in the value of shares of the company.Discuss the interpretational challenges that beset the application of section 218(2) of the Companies Act 71 of 2008 for delictual claims based on pure economic loss. (10)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Smith and Roberson Business Law

Authors: Richard A. Mann, Barry S. Roberts

15th Edition

1285141903, 1285141903, 9781285141909, 978-0538473637

More Books

Students also viewed these Law questions

Question

=+a. Who is correct, the administration or the students?

Answered: 1 week ago