Maleholdings Plc is the parent company of a large corporate group. Its various subsidiaries operate in a number of different industries, including house-building. Ameer, a director of Maleholdings, learns that a large piece of vacant land in Male city is about to be sold by auction. The land is suitable for house-building, but houses can only be built if the Local Authority gives its permission. The Local Authority says it will give permission, but only on condition that the company building the houses carries out very expensive landscaping works once the houses have been built. Ameeru calculates that carrying out these works will make building houses on the land unprofitable.
To get around this problem, Maleholdings incorporates a wholly-owned subsidiary, Shelterbuild Ltd, with a share of £1. Shelterbuild Ltd purchases the land and, in return for being given permission to build houses on the land, enters into an agreement with the Local Authority to carry out the landscaping works. Shelterbuild quickly builds, and sells, the houses for a substantial profit; wich is immediately paid to Maleholdings as a dividend and as ‘management charges’. Shelterbuild has now informed the Local Authority that it is insolvent, and does not intend to carry out the landscaping works.
During the construction of the houses, Maleholdings told Shelterbuild’s sole director, Fathima, that she must keep cost to an absolute minimum. Maleholdings was aware that Shelterbuild was using a number of very dangerous work practices in order to cut costs, but Maleholdings did nothing to stop this. Himza, a bricklayer employed by Shelterbuild, was badly injured as a result. Advise: (a) the Local Authority whether it can force Maleholdings to pay for the costs of carrying out the landscaping works; and (b) Himza, whether she can claim damages from Maleholdings for the injuries she has suffered. Business Law Assignment: I need help writing a research paper.
