C had 15% shareholding in a company. Company made issue of shares despite knowing that C would be unable to exercise her rights o pre-emption, and as result shareholders was decreased to 8%. Sued under s.994. Held:
· Where directors know a shareholder might not have enough money to subscribe, directors must consider what price could and should be extracted from those willing and able to subscribe
Ø i.e. should not simply issue shares at par without thinking about it
· This is particularly case where directors exercising the power stand to benefit from the exercise of power in a particular way.
· Price that should be offered depends on circumstances of case.