Tim, Amy and Lachlan are directors of a company called Centrex Ltd which is listed on the ASX. Tim and Amy have backgrounds in accounting. Lachlan has a geology background.

Centrex has made a takeover offer for Western Plains Group Limited (WPG). WPG has identified some iron ore deposits in the northern parts of Western Australia. It is in the process of obtaining the rights to start mining. Centrex has offered WPG shareholders $1.32 per share.

Centrex’s takeover bid for WPG was successful. However, now that the transaction is completed it has become evident that the rock sample studies that were reviewed by the Board as part of the due diligence were flawed. Anyone with a background in geology would have identified from reviewing the reports that, the iron ore is low grade and has very high impurities. Further, they would have concluded that even at the most optimistic iron ore price, based on current technologies, this iron ore could not be extracted from the ground in a way that would cover the costs.

Centrex has also made a takeover offer for Iron Ore Holdings Ltd (IOH). IOH has a large iron ore mine in South Australia, called Eagle Rock. Centrex has offered IOH shareholders $1.44 per share.

Centrex has managed to gain control of IOH as a result of the takeover offer but it has only obtained 75% of the shares. Hence, it is unable to acquire compulsorily the remaining shares. It has control of the board so it has appointed Matthew, Mark and Luke as directors of the board. The directors of IOH have authorised several unusual transactions:

• ? Sold the Eagle Rock mine to Centrex for $10 million. It has been independently valued at $100 million.
• ? Acquired shares in WPG at $4.83 per share. The shares were purchased from Centrex after its takeover of WPG and after the problems with the rock sample studies were known.
• Tim, Amy and Lachlan are all passionate supporters of the Canberra Crusaders. The Canberra Crusaders play in the national football competition. Poor performances have led to lower attendances at games in recent years. This, in turn, has led to financial troubles for the Canberra Crusaders.
• Tim, Amy and Lachlan decide at a Board meeting to give $1 million of company money to the Canberra Crusaders to assist with the financial troubles. In return the Crusaders will give Tim, Amy and Lachlan free tickets to all their games in the 2018 season.

Under the Corporations Act, including remedies, arising from these facts, what are the issues including in this case? Takeover issues are not required to be considered