Type or paste que TransKaroo Exploration Ltd is a mining company, whose business included fracking for gas. The direct

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Type or paste que
TransKaroo Exploration Ltd is a mining company, whose
business included fracking for gas. The directors are Gerry,
Khulubuse and Atul. All of the directors were incorporators
of the company and became directors once the company was
incorporated and they had all consented to be named as director in
the prospectus offering shares to the public.
Included in its prospectus was a statement to the effect that
they had acquired the mining rights to a piece of land in the Karoo
near Oudtshoorn. The statement indicated that they had acquired
rights to frack for gas. Atul had been mandated by the others to
acquire the geological report. A geological report by Dr
Verwey, a geologist, employed at the University of the Free State,
was referred to in the prospectus and attached to the
prospectus. The geological report was to the effect that the
prospects of success were extremely high. Dr Verwey had
consented to the attachment of his report.
On the faith of the prospectus many people subscribed for shares
in TransKaroo Exploration Ltd. As it turned Dr Verwey was
completely wrong with regard to the prospects of the success of the
venture. It was later discovered that Dr Verwey was the third
geologist that Atul had approached and that the other two reports
were in agreement that if there was gas to be extracted from that
piece of land it would be economically unviable to exploit
it. Atul did not disclose to Gerry and Khulubuse that he had
received the two negative reports.
Who could the shareholders hold liable for that
loss?
(10)
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