Exam (elaborations)
LML4806 Assignment 1 (Complete Answers) Semester 1 - Due: March 2024
- Course
- LML4806
- Institution
- University Of South Africa (Unisa)
LML4806 Assignment 1 (Complete Answers) Semester 1 - Due March 2024
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LML4806ASSIGNMENT: 01
SEMESTER: 01
DUE DATE: MARCH 2024
Written Assignment Submission Guidelines:
Please ensure that your assignment is submitted electronically through the myUnisa platform no
later than March 2024. Kindly note that fax or email submissions will not be accepted.
NB: Assignment submitted to the lecturer(s) through email will not be considered.
QUESTION: 1
Mandla is both a director and shareholder of Cargo Logistics Ltd. He wants to buy more shares
in Cargo Logistics Ltd but does not have enough money to do so. He offers to rent out a
warehouse to Cargo Logistics Ltd. Cargo Logistics Ltd agrees to pay R1.2 million per annum as
rent for the warehouse. Mandla then uses part of the money to purchase 10 000 shares in Cargo
Logistics Ltd.
With reference to the relevant case law, statutory provisions and the facts provided in the
above scenario, discuss whether Cargo Logistics Ltd has provided financial assistance for the
purchase of its securities. (6) 4
Answer:
In analyzing the scenario presented, we need to assess whether Cargo Logistics Ltd has indeed
provided financial assistance for the purchase of its securities, as this raises significant legal
implications.
Financial assistance, in this context, refers to any assistance, whether directly or indirectly,
provided by a company for the purpose of purchasing its own shares or shares in its holding
company. Section 44 of the Companies Act of 2008 prohibits a company from providing financial
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