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, 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
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