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MN Software Ltd. is owned 50%-50% by M and N. Each appoints 2 directors (board of 4); decisions are by simple majority. The articles give M the right to appoint the chairman, who has a CASTING VOTE in case of a deadlock. Is this joint control?
ANo — M can use 2 directors + the chairman's casting vote to break ties, so M alone has power over relevant activities
BYes, because shareholding is 50:50
CYes, because each side appoints equal directors
DNo — but only if the chairman is independent
Answer & Solution
Correct answer: A. No — M can use 2 directors + the chairman's casting vote to break ties, so M alone has power over relevant activities
The casting vote tips control to M unilaterally. Ind AS 111 illustration 7: M has the ability to force decisions through 2 director votes + 1 casting vote, so M alone has power over the relevant activities; there is no joint control.
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