Tsodilo Mines Ltd is a company which mines nickel. Themba and Tumi are two of the directors. The board of directors is offered land adjoining one of its present quarries in Mahalapye with a view to working it, but they decide that the company is in such a bad fi nancial state that it cannot afford the land. Themba and Tumi, while remaining directors of Tsodilo Mines Ltd, subsequently form another company, Kagiso Investments (Pty) Ltd, which purchases the land for P700 000·00. It is later discovered that the land is very rich in platinum. Tsodilo Mines Ltd’s fortunes are suddenly reversed and it purchases the land from Kagiso Investments (Pty) Ltd for P2 000 000·00. Themba and Tumi do not reveal their interest in the matter. After Tsodilo Mines Ltd has been working the new mine for six months, the other directors discover what has taken place.Required:Advise the directors of Tsodilo Mines Ltd as to the legal position. (10 marks)
