LML4806 Exam Questions With 100% Verified
Solutions
Requirements for person to qualify as BRP? -answers - person must not have any other
relationship with company that would lead a reasonable and informed 3rd party to conclude that
his integrity, impartiality or objectivity is compromised by that relationship - former directors
of company = integrity compromised
What kind of insiders are there? -answers - ITO Financial Markets Act, an insider who knows
he has inside info & who acts indirectly/directly through an agent for his own account in
securities on a regulated market to which inside info relates, comments an offence (S78)
- Insider who knows info & who deals for any other person, commits an offence
- Person who deals for an insider directly or indirectly through an agent in securities listed on a
regulated market to which the inside info possessed by the insider relates or which are likely to
be affected by it, who knew that such a person is an insider, commits an offence
- insider who knows he has info commits an offence if he discloses info to another person and to
causes that person to deal in that security (disclose info & deal in info)
What is insider trading -answers - trading of securities
- based on information
- that is not yet made public
- which if obtained as public knowledge
- would have a material effect on the price or value of the security
What happens if BRP have not ended after a period of time? -answers - S132(3)(1) -
practitioner must prepare a report on progress and update it at the end of each subsequent
month until the end of proceedings
, - also deliver report to each affected person & to court if proceedings have been subject to a
court order or companies commission
What happens if BRP has been rejected? -answers - S153
- BR practitioner will advise meeting that company will apply to court to set aside the result of
the vote on grounds it was inappropriate
- court will set aside if reasonable and just to do so
- court will consider interests represented by the person who voted against the proposed BR plan
- provision if any, made in proposed plan BR with respect to interests of that person
- fair and reasonable estimate of the return to that person if the company were to be liquidated
- FNB v KJ Foods - single inquiry & value judgement. If set aside, BRP adopted by law
Corporate social responsibility -answers - Seeks to make companies responsible members of
the community
- Businesses have a responsibility towards the societies in which they operate and that this
responsibility needs to be managed
- Voluntary commitment by companies to manage their role within society responsibly - marks a
departure from the traditional perception that the only object of business is to make profits
- eg purpose of CA is to promote development of SA economy by encouraging transparency, and
high standards of corporate governance
- CA seeks to reaffirm the concept of the company as a means of achieving economic and social
benefits
- CA seeks to promote development of companies within all sectors of the economy & to
encourage active participation in economic organisation, management and productivity
- CA seeks to encourage efficient and responsible management of companies
- CA provides for non profits that are incorporated for social activities, public benefit, cultural
activities or group interest
- CA may offer a wide circle of stakeholders
- CA requires certain categories of companies to appoint a social and ethics committee to
monitor company activities
Solutions
Requirements for person to qualify as BRP? -answers - person must not have any other
relationship with company that would lead a reasonable and informed 3rd party to conclude that
his integrity, impartiality or objectivity is compromised by that relationship - former directors
of company = integrity compromised
What kind of insiders are there? -answers - ITO Financial Markets Act, an insider who knows
he has inside info & who acts indirectly/directly through an agent for his own account in
securities on a regulated market to which inside info relates, comments an offence (S78)
- Insider who knows info & who deals for any other person, commits an offence
- Person who deals for an insider directly or indirectly through an agent in securities listed on a
regulated market to which the inside info possessed by the insider relates or which are likely to
be affected by it, who knew that such a person is an insider, commits an offence
- insider who knows he has info commits an offence if he discloses info to another person and to
causes that person to deal in that security (disclose info & deal in info)
What is insider trading -answers - trading of securities
- based on information
- that is not yet made public
- which if obtained as public knowledge
- would have a material effect on the price or value of the security
What happens if BRP have not ended after a period of time? -answers - S132(3)(1) -
practitioner must prepare a report on progress and update it at the end of each subsequent
month until the end of proceedings
, - also deliver report to each affected person & to court if proceedings have been subject to a
court order or companies commission
What happens if BRP has been rejected? -answers - S153
- BR practitioner will advise meeting that company will apply to court to set aside the result of
the vote on grounds it was inappropriate
- court will set aside if reasonable and just to do so
- court will consider interests represented by the person who voted against the proposed BR plan
- provision if any, made in proposed plan BR with respect to interests of that person
- fair and reasonable estimate of the return to that person if the company were to be liquidated
- FNB v KJ Foods - single inquiry & value judgement. If set aside, BRP adopted by law
Corporate social responsibility -answers - Seeks to make companies responsible members of
the community
- Businesses have a responsibility towards the societies in which they operate and that this
responsibility needs to be managed
- Voluntary commitment by companies to manage their role within society responsibly - marks a
departure from the traditional perception that the only object of business is to make profits
- eg purpose of CA is to promote development of SA economy by encouraging transparency, and
high standards of corporate governance
- CA seeks to reaffirm the concept of the company as a means of achieving economic and social
benefits
- CA seeks to promote development of companies within all sectors of the economy & to
encourage active participation in economic organisation, management and productivity
- CA seeks to encourage efficient and responsible management of companies
- CA provides for non profits that are incorporated for social activities, public benefit, cultural
activities or group interest
- CA may offer a wide circle of stakeholders
- CA requires certain categories of companies to appoint a social and ethics committee to
monitor company activities
