LML4806
Assignment 1 Semester 1 2024
Detailed Solutions, References & Bibliography
Due Date: March 2024
QUESTION 1
In order to ascertain whether an intended transaction constitutes financial assistance in
connection with the purchase of shares, the transaction should pass two phases. The first
phase is whether the transaction constitutes financial assistance and the second phase is
whether the financial assistance is for the purpose of acquiring shares in a company. To
ascertain whether the transaction qualifies as financial assistance, the impoverishment test
as formulated in the case of Gradwell (Pty) Ltd v Rostra Printers Ltd 1959 (4) SA 419 (A)
should be relied upon.
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