Question 4

Badminton Pty Ltd is a land development company. It was formed originally with 5 members, including Bob. Over the years, further shares have been issued to the families of each original member. No one family has a majority. There are 3 directors. The constitution of the company provides for the retirement of directors after 2 years and appointment of new directors or reappointment at the annual generalmeeting (AGM). Any member may stand for election as a director. Bob wishes to be a director and he nominates for election at the next AGM. Bob is a popular member of the company, but he has very little business acumen. The 3 incumbent directors issue additional shares to their families prior to the AGM. The effect of the issue is to alter the voting power and make it impossible for Bob to be elected. Advise Bob about any rights that he may have.