Computeq Ltd is a listed company incorporated in NSW with an issued capital of $20 million. It is mainly a computer hardware company which produces computer equipment and supplies the parts to globally renowned and branded computer companies. Mints Ltd holds 40 per cent of the issued capital of Computeq. Miles Ltd holds 35 per cent and the remaining 25 per cent is held by a diverse group of shareholders. All of these shares are 'ordinary' shares, holding same rights, privileges, burdens and liabilities to all members. The company is located in North Ryde due to its proximity to the Macquarie University Research Park and the fact that the business advice they received suggested that the area is good for Computeq's type of business. Other than the directors, there are 56 employees at Computeq. Very recently Computeq tendered for the construction of a large hardware production plants in Parramatta and is likely to be the successful bidder. It will need an injection of funds to construct the production plant. The
Computeq Ltd is a listed company incorporated in NSW with an issued capital of $20 million. It is mainly a computer hardware company which produces computer equipment and supplies the parts to globally renowned and branded computer companies. Mints Ltd holds 40 per cent of the issued capital of Computeq. Miles Ltd holds 35 per cent and the remaining 25 per cent is held by a diverse group of shareholders. All of these shares are 'ordinary' shares, holding same rights, privileges, burdens and liabilities to all members. The company is located in North Ryde due to its proximity to the Macquarie University Research Park and the fact that the business advice they received suggested that the area is good for Computeq's type of business. Other than the directors, there are 56 employees at Computeq. Very recently Computeq tendered for the construction of a large hardware production plants in Parramatta and is likely to be the successful bidder. It will need an injection of funds to construct the production plant. The
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:Computeq Ltd is a listed company incorporated
in NSW with an issued capital of $20 million. It
is mainly a computer hardware company which
produces computer equipment and supplies
the parts to globally renowned and branded
computer companies. Mints Ltd holds 40 per
cent of the issued capital of Computeq. Miles
Ltd holds 35 per cent and the remaining 25 per
cent is held by a diverse group of shareholders.
All of these shares are 'ordinary' shares, holding
same rights, privileges, burdens and liabilities
to all members. The company is located in
North Ryde due to its proximity to the
Macquarie University Research Park and the
fact that the business advice they received
suggested that the area is good for
Computeq's type of business. Other than the
directors, there are 56 employees at
Computeq.
Very recently Computeq tendered for the
construction of a large hardware production
plants in Parramatta and is likely to be the
successful bidder. It will need an injection of
funds to construct the production plant. The
directors of Computeq are concerned that
Mints Ltd, which also owns a different
hardware production plant in Perth, will launch
a takeover of Computeq.
At a board meeting, the directors of Computeq
resolve to allot a substantial number of shares
to Miles in consideration for a promise that
Miles will arrange finance for the construction
of the Parramatta hardware production plant.
The allotment to Miles varies the shareholding
power of Computeq such that, after the
allotment, Mints Ltd will only command 10 per
cent of voting power in Computeq.
On the basis of the facts outlined here, you are
REQUIRED to:
Advise the directors of Computeq about the
possibility of any legal challenge to their
actions and describe all possible legal
consequences. What laws and procedures may
apply in this case?
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