Dante Ltd has an issued capital of $1 million consisting of 700,000 ordinary shares and 300,000 preference shares. The Dante family who comprise the majority of the company's directors owns the majority of the ordinary shares. Lee, a director of Dante Ltd, owns all of the preference shares. Under the constitution, each share carries one vote irrespective of its class of shares. In addition, the constitution provides that any preference shareholder owning at least 25 per cent of the company's issued capital is entitled to be appointed as a director. At a recent board meeting, a majority of the directors decided:

 

1. That the company should issue a further 1 million preference shares with a $1 issue price paid to 1 cent to the ordinary shareholders. These preference shares will rank equally with Lee's preference shares; and
2. To make a bonus issue of ordinary shares to the existing ordinary shareholders.

Lee believes the share issues will adversely affect the value of her shares.

Explain what rights, if any, she has under ss 246B-246E of the Corporations Act to prevent the company from carrying out the directors' decisions.

Answer rating: 100% (QA)

Under ss 246B246E of the Corporations Act Lee as a shareholder has a right to seek relief from the c... View the full answer