COMPANY LAW

      Vegas Ltd was incorporated on January 2014 and was floated on the Australian Securities Exchange (ASX) in June 2014. As part of the initial public offering (IPO) the company issued300 million shares at $1.50 and raised$450 million from investors. Vegas Ltd is primarily involved in property development specialising in casinos and luxury hotels. Vegas Ltd has three non‐executive directors:‐, Dr No, Mr White and Mr Big. Vegas Ltd has one executive director, Mr Bond who is also the company’s chief executive officer. Mr Big is also the company’s Chairperson and has an accounting qualification. Mr Goldfinger is the company’s chief financial officerbut is not a director of the company. Goldfinger was responsible for preparing the financial statements including the balance sheet contained in the company’s annual reportfor the company’s external auditors, EnronAuditors. Moneypenny is Bond’s personal assistant and was also employed as the company secretary. Vegas Ltd began developing and acquiring new and existing casinos in Macau in March2015. By the end of year, the company had spent nearlyall of the funds raisedthrough the IPO. In April 2015 the company decided to borrow funds from Cayman Bank. The bank manager at Cayman Bank, Slick Willy advises Vegas Ltd to borrow using a 12 month short‐term bridging loan of $500 million and “spread” the borrowing over its balance sheet. Slick Willy advises Bond and Goldfinger that most of the borrowings could be characterised as non‐current since the final repayment instalment could be rolled into next financial year with the maturity recorded as July 2016 even though most of the loan repayments are due within current financial year. At a recentmeeting, the board of directors considers the approach of Cayman Bank and decide to go ahead with the financing arrangement. Unfortunately, no minutes of the crucial meeting were recorded by Moneypenny in her capacity as the company secretary and as required under the law. Bond, decides to draft an announcement to the ASX advising the market that the company has received new funding for the purposes of acquiring a casinoin London’s Mayfair district called Casino Royale. The contents of the announcement were also discussed at the board meeting. However, the draft was prepared by Ms Moneypenny after the meeting was concluded. Dr No, Mr Big, Mr Goldfinger and Mr White did not read the draft ASX announcement. Bond decides to tell his personal assistant, Ms Moneypenny to buy some shares in Vegas Ltd before the Casino Royale announcement is released to the ASX. The ASX announcement stated:‐ “VegasLTD is pleased to announce the acquisition of Casino Royale in London fully funded through the issue of long term non‐current debt.” Moneypennypurchases $7,000 of shares in Vegas Ltd the day before the announcement at $1.75 per share. After the announcement is released to the ASX the share price of Vegas Ltd fluctuates from $1.90 down to $1.35. Moneypenny decides to sell her shares for a loss at $1.50, crystallising a total loss of $1,000 on her recentpurchase. The 2016 annual reportwas also table at the board meeting in a pack containing 600 pages. The annual reportwas signed off by the company’s external auditors, EnronAuditors. Enronundertook two auditsof the company’s accounts but did not detectany irregularities during the financial year. The board approved the annual reportand directors signed off on the report. The annual reportof Vegas Ltd showed:‐ GROUP QUESTIONS QUESTION2:‐ WHAT POSSIBLE DEFENCESMIGHT BE AVAILABLE TO MR BOND, DR NO, MR WHITE, MR GOLDFINGER AND MS MONEYPENNY? WHAT PENALTIES MAY BE IMPOSED ON THE DIRECTORS, CHIEF FINANICAL OFFICER AND COMPANYSECRETARY? PLEASE USE CASES AND/OR RELEVANT SECTIONS FROM THE CORPORATIONS ACT.