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Question 161 (.1 Forex Ltd is run by ve directors, Emmy, Frankie, Gerry, Hazel and Iris, who collectively hold 40% of the company's shares. The net asset value of the company is HK$1 .4 billion.\" i4 Emmy has been approached by a rival company, Stanching Ltd, which is considering taking over F ore-x Ltd. Stanching Ltd agrees to hire Emmy as a consultant, and to give her an undertaken that if she successfully persuades the majority of shareholders of F orex Ltd to sell out to Stanching Ltd, they will give her personally 5% of the net asset value of Enron Ltd as her reward. 6' ' {.1 In his free time, Frankie, with the approval of Forex Ltd, runs a business, Tank Ltd, supplying goods that are useful to Forex Ltd. There is a contract on normal commercial terms for those goods. Tank Ltd has been approached by a rival concern who wants to have a sole purchase agreement with Tank Ltd, so that Tank Ltd would not be able to continue to supply F orcx Ltd with the goods. Frankie sees this as opportunity to put pressure on Forex Ltd to pay more for Tank m goods. The value of the contract bkbween Forex Ltd and Tank Ltd is HK$60 million per year. The proposed new value of the'contract with rival would be HK$90 million per year? (_l Gerry is moving home and taking on extra nancial commitments, he wants the company to lend him HK$15 million towards his home purchase, for which he will pay a reduced rate of interest. He also wants to be given a sixyear service contract. This is in order to reassure his bank, from which he is borrowing money to buy more shares in F orex Ltd.