Company #2 has been buying up shares in Company #1, and now holds 50% of Company #1's shares.  Most of the shares have been sold to Company #2 by investors who are dissatisfied with the way in which the board of Company #1 has been running the company. 

 

Company #2 has made no secret of its view that, if it gained control over Company #1, it would elect a new board.  After hearing about this, the board of Company #1 contacts Company #3 a major shareholder in Company #1, who has been happy with the board's performance, and offers to issue Company #3 with $5 million worth of shares, which Company #3 accepts.  The Company #1 board minutes approving the sale stated that it had been entered into because there was a need to increase Company #1's capital reserves.  The share issue results in Company #2 holdings in Company #1 being reduced to 42%.

What are the specific issues and what remedies might be available to ASIC  including statutory and relevant case-law authority.