Computeq Ltdis a listed company incorporated in NSW with an issued capital of $20 million. It is mainly a computer hardware company which produces computer equipment and supplies the parts to globally renowned and branded computer companies.Mints Ltdholds 40 per cent of the issued capital ofComputeq.Miles Ltdholds 35 per cent and the remaining 25 per cent is held by a diverse group of shareholders. All of these shares are 'ordinary' shares, holding same rights, privileges, burdens and liabilities to all members. The company is located in North Ryde due to its proximity to the Macquarie University Research Park and the fact that the business advice they received suggested that the area is good forComputeq'stype of business. Other than the directors, there are 56 employees atComputeq.

Very recentlyComputeqtendered for the construction of a large hardware production plants in Parramatta and is likely to be the successful bidder. It will need an injection of funds to construct the production plant. The directors ofComputeqare concerned thatMints Ltd,which also owns a different hardware production plant in Perth, will launch a takeover ofComputeq.

At a board meeting, the directors ofComputeqresolve to allot a substantial number of shares toMilesin consideration for a promise thatMileswill arrange finance for the construction of the Parramatta hardware production plant. The allotment toMilesvaries the shareholding power ofComputeqsuch that, after the allotment,Mints Ltdwill only command 10 per cent of voting power inComputeq.

On the basis of the facts outlined here, you areREQUIRED to:

Advise the directors ofComputeqabout the possibility of any legal challenge to their actions and describe all possible legal consequences.What laws and procedures may apply in this case? [10 marks]