Dilution attacks are among the most common forms of minority oppression. NZSK Legal — led by Khoo Ai Theng — moves fast to protect your shareholding.
Indicators of Oppressive Dilution
- Rights issue at significant undervalue
- Notice period too short for minority to fund participation
- Issue to friendly parties (placement) bypassing existing shareholders
- Issue without proper commercial justification
- Repeated rights issues triggering minority squeeze-out
- Conversion of debt to equity at unfavourable terms
Frequently Asked Questions
Q: Can I stop a share issue that dilutes me?
A: Yes, where the issue is oppressive. NZSK Legal pursues injunctive relief and section 346 CA 2016 claims. Speed matters — apply before shares are issued.
Q: What are pre-emption rights on share issue?
A: Rights in company constitution or SHA giving existing shareholders priority before new shares are issued to outsiders. Breach gives rise to enforcement remedies.
Q: What if I cannot afford to participate in a rights issue?
A: If genuinely unable, you may lose your stake proportionately — but if structured oppressively, court remedies apply. NZSK Legal assesses the oppression dimension.
Q: Can the company issue shares without shareholder approval?
A: Depends on constitution and statutory requirements. Material issues typically require shareholder approval. NZSK Legal challenges unauthorised issues.
Q: How fast must I act on a dilution threat?
A: Immediately. Once shares are issued and registered with SSM, unwinding is harder. NZSK Legal pursues injunctive relief same-week where required.
