1.  

Mazao Bora Ltd. is in the business of importing seeds. The company is about to make a new issue of 800,000 shares of Sh.20 each. The prospectus has stated that the seeds produced the company yield 20 bags per acre even on arid land" and that the company was the only one with such kind of seeds. There was also a publication in the local newspaper about the shares. Additional information: 1. Musa Potele did not read the prospectus but applied for the company's shares and was allocated 4,000 shares at Sh.40 per share. 2. Bena Mwanzi read the prospectus and was not allocated the company's shares. She bought 6,000 of the company's shares at the securities exchange at Sh.50 per share. 3. Isaack Mulwa read the publication in the local newspaper about the company's shares and bought 10,000 shares at the securities exchange at Sh.55 per share. 4. An actual analysis of the seeds was done and it was discovered that the seeds were not as productive, only yielding 5 bags per acre and could only thrive in wet land. The shares of Mazao Bora Ltd. thereafter dropped in value to Sh.5 per share. With reference to the above scenario: - a) Explain three types of misrepresentation and the remedies. Marks) b) Explain three elements of misrepresentation. Marks) c) Advise Musa, Bena and Isaack on possible action against the company. (6 (6 Marks)