Directors issued around 6,000 shares for purpose of defeating a takeover of company; claimed to be doing this in best interests of employees and shareholders of company. This succeeded, but directors were sued by company for breach of duty. Held:
· Test for improper purposes is objective
Ø i.e. fact that directors though they were acting in best interests of employees/shareholders is irrelevant
· Primary purpose of power to allot shares is raising of capital.
· Thus use of power to block a takeover is breach of duty.