Q1.Seven Dwarves Ltd operates nursing homes. Its directors are Sleepy, Grumpy and Dopey. They hold 30% of the shares in the company. The directors allocate 1 million new shares to certain business associates.This has upset certain shareholders who claim that the placement was made with a view to preventing a future takeover offer being made.The directors claim that the allotment was made to raise cash required for the company's future needs.Advise the shareholders.

Q2.Funds Ltd is a listed public company.Parker, one of the directors of Funds Ltd is a director of Builders Pty Ltd.Funds Ltd is contemplating entering into a contract with Builders Pty Ltd to erect a block of home units for sale as strata title units.Parker personally holds no shares in Builders Pty Ltd, although he has made a substantial loan to it.Twenty per cent of the shares are held by Mrs. Parker, his wife, and 20% by trustees for his children.Note that Parker is one of two trustees.The remaining shares are held by persons who are not members of the Parker family.

Outline the steps which should be taken before Funds Ltd signs an agreement with Builders Pty Ltd, indicating the consequences of failure to take those.