Question 1

Sports Ltd prepared a tender contract in June 2018 to build a football stadium for the Olympic Games in Japan.Lee is responsible for the cost and profit analysis for the tender contract and for preparing and lodging the tender bid on behalf of Sports Ltd.The closing date for the lodgement of tenders was 1 August 2018.

Lee realised that this is a highly profitable tender project.In July 2018, Lee incorporated a company called Rich Pty Ltd in which he is the sole shareholder.He appointed his old friend, Bob, who is an experienced builder, as managing director of this new company.

Lee encouraged Bob to ready a tender, on behalf of Rich Pty Ltd, for the company to build the football stadium for the Olympic Games.Bob successfully tendered for this construction contract on behalf of Rich Pty Ltd in July 2018, based on the financial information supplied by Lee.

Rich Pty Ltd won the construction tender, as its bid was lower than Sports Ltd, and is awarded the contract by the Japanese Olympics Committee.Since winning the tender, Rich Pty Ltd has successfully completed construction of the football stadium and has made a $1000,000 profit.

The directors of Sports Ltd have recently become aware of Lee's participation in the tender bid by Rich Pty Ltd.

(a)Advise Sports Ltd whether the company can sue Rich Pty Ltd and recover the profit of $1000,000 made by Rich Pty Ltd.[20 Marks]

And

(b)ASIC, as the corporate regulator, has a range of enforcement tools under the Corporations Act.Advise ASIC which is the most appropriate law enforcement tool to use, with reference to the question above, and the reasons for advice.Your answer must also include the potential legal consequences of the advice given to ASIC.[10 Marks]

Your answers above must be supported by relevant precedents and relevant provisions of the Corporations Act.