LML4806
Assignment 1
Semester 1 of 2023
Question: 1
Musa, Amos, Sipho and Jimmy are directors of Khubo Limited. Jimmy was
appointed as an executive director of Khubo Limited three years ago under a
five-year contract of employment with the company. Musa has expressed his
concerns to the board of directors that for the past two financial years Jimmy
has been failing to ensure the timely preparation and submission of the
company’s annual financial statements, and that Jimmy omitted to sign the
annual financial statements for the previous financial year as the authorised
director, as required. Musa has also informed the board of directors that, after
joining Khubo Limited, Jimmy was removed as chairperson of the board of
trustees of the JF Pension Fund after he forged some documents and withdrew
R2 million from the JF Pension Fund’s bank account for his personal use.
Advise Jimmy on the following:
1.1 Whether under the circumstances of this case the board of directors of
Khubo Limited will have valid grounds to remove him (Jimmy) as a director
of the company. (6)
The board of directors may remove a director if a company has more than two
directors.
It is alleged by a shareholder or director that a director has become ineligible or
disqualified in terms of the Act to be a director.
Assignment 1
Semester 1 of 2023
Question: 1
Musa, Amos, Sipho and Jimmy are directors of Khubo Limited. Jimmy was
appointed as an executive director of Khubo Limited three years ago under a
five-year contract of employment with the company. Musa has expressed his
concerns to the board of directors that for the past two financial years Jimmy
has been failing to ensure the timely preparation and submission of the
company’s annual financial statements, and that Jimmy omitted to sign the
annual financial statements for the previous financial year as the authorised
director, as required. Musa has also informed the board of directors that, after
joining Khubo Limited, Jimmy was removed as chairperson of the board of
trustees of the JF Pension Fund after he forged some documents and withdrew
R2 million from the JF Pension Fund’s bank account for his personal use.
Advise Jimmy on the following:
1.1 Whether under the circumstances of this case the board of directors of
Khubo Limited will have valid grounds to remove him (Jimmy) as a director
of the company. (6)
The board of directors may remove a director if a company has more than two
directors.
It is alleged by a shareholder or director that a director has become ineligible or
disqualified in terms of the Act to be a director.
