I. Question one (20 marks) Sunny Inc. is an investee company. Policies over the relevant activities...

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I. Question one (20 marks) Sunny Inc. is an investee company. Policies over the relevant activities can be changed only at special or scheduled shareholders' meetings. This includes the approval of material sales of assets as well as the making or disposing of significant investments. Sunny Inc. holds annual shareholder meetings at which decisions to direct the relevant activities are made. The next scheduled shareholders' meeting is in eight months. Shareholders that individually or collectively hold at least 5% of the voting rights can call a special meeting to change the existing policies over the relevant activities with 30 days' notice. Hai Plc holds an option, which if exercised, would give it ownership of shares with more than 50% of the voting rights of Sunny Inc. This option is exercisable in 25 days and is deeply in the money. Required: Is Sunny Inc. a subsidiary of Hai Ple? Reasons must be given. I. Question one (20 marks) Sunny Inc. is an investee company. Policies over the relevant activities can be changed only at special or scheduled shareholders' meetings. This includes the approval of material sales of assets as well as the making or disposing of significant investments. Sunny Inc. holds annual shareholder meetings at which decisions to direct the relevant activities are made. The next scheduled shareholders' meeting is in eight months. Shareholders that individually or collectively hold at least 5% of the voting rights can call a special meeting to change the existing policies over the relevant activities with 30 days' notice. Hai Plc holds an option, which if exercised, would give it ownership of shares with more than 50% of the voting rights of Sunny Inc. This option is exercisable in 25 days and is deeply in the money. Required: Is Sunny Inc. a subsidiary of Hai Ple? Reasons must be given.

Answer rating: 100% (QA)

No Sunny Inc is not a subsidiary of Hai Ple To be considered a subsidiary Hai Pl... View the full answer