Part (d) Discuss the requirements, in terms of the Companies Act, that BioEnergy Power should have complied with in order to grant the contract to Gelden Transport.
answer
The document explains the requirements under the Companies Act for BioEnergy Power to grant a contract to Gelden Transport. The core issue is that the financial director, Kobus, has a personal financial interest because the contracting party, Gelden Transport, is owned by his son-in-law, Pieter.
According to the solution, Kobus should have:
Disclosed his interest to the board, including Pieter's ownership.
Provided all relevant information, such as the fact that the loan to Pieter was from BioEnergy Power.
Shared any pertinent observations, like the unreliability of Gelden Transport's trucks.
Recused himself from the decision-making process.
Abstained from signing the contract.
The solution also notes that if these requirements aren't met, the contract could still be ratified by an ordinary resolution of the shareholders.
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