Luangwa Mineral Resources is a State Owned Enterprise (SOE) that was in past managed parastatal before being privatize after liberalization of the Zambia economy. The privatization of the firm was decided because the firm had been run down and was not performing well as expected. Further the firm accrued huge liabilities and was running losses consistently. After being privatized the new owners (majority shareholders 75%) re capitalized the firm by investing $160 million to improve operation and clear outstanding debts. The new Board of Directors brought in goods expertise and knowhow which greatly improved the way the company was managed. The company was turned around within Three years and become profitable and as a result government was able to receive its share of profits. The company remained profitable until a regime changed policy that now required government to own majority share in a bid to accrue more benefits for the state. The changes in policy meant the minority foreign investors could not control decision making within the company as now government took more control of the affairs. The Government appointed a new board and new management took over. The company in a span of four years since these changes has reached a stage where it is now failing to meet its obligations. It has accrued huge debts and has started making losses due to poor decision making regards operations. Audits reports indicated that miss application of resources to non-value adding activities, poor cash flow management, over employment and abuse of company resources and board members (Chairperson) and management staff. It was reported that in previous quarter the board had spent $1.0 million on workshops, travel allowances and meetings alone much of the money obtained through an overdraft with a local bank. This was done at the expense of procuring a critical component of the production process that only costed $150,000. Consequently production was shut down for six months. This has led to wide spread uproar in the media and among concerned stakeholders and the companys board and corporate governance system has been questioned. Among the many expectations from stakeholders is the effectiveness of the board through composition of members, integrity and ethical values of board members and ability to critically analyses the companys long term sustainability Required: i. Discuss the objective and importance of Corporate Governance in general to the operations of an organization. (6 Marks) ii. Identify and discuss the Agency Problem issues in this case study that may have led to the current situation how this can be rectified. (10 Marks) iii. Discuss how Corporate Finance can be applied in guaranteeing the companys long term financial sustainability while balancing wealth maximsation.