The Enterprise Act, Legislacy on Fair Valuation of Shares and Fraudulent Trading Free Essay Example, 2750 words

The fact that prices of newly-issued shares of private companies have really no established and strict principles for valuation is illustrated by the case of Re Bird Precision Bellows Ltd [1986] Ch 658, where the court declared that it even it enjoys wide discretion in determining valuation to serve the ends of justice and fairness. This is a principle likewise applied in the case of Scottish Cooperative Wholesale Society Ltd v Meyer [1959] AC 324, where the court held that it possesses a broad discretion to determine what constitutes fair price in the valuation of shares. In the case of Re Cumana Ltd [1986] BCLC 430, indicate that even the notion of fairness with respect to company matters, including share prices, is a complicated issue and highly tenuous. Fairness is dependent on the circumstances, according to the case, and since circumstances do change then it follows that even the notion of fairness is unfixed. In this case, a majority shareholder, who anticipated a major compa ny move, created circumstances that would result in the depreciation of the prices of the company shares. We will write a custom essay sample on The Enterprise Act, Legislacy on Fair Valuation of Shares and Fraudulent Trading or any topic specifically for you Only $17.96 $11.86/page