Gilt Ltd is a small company with an issued share capital of 100,000 €1 shares held by 100 members.Harry, the managing director of Gilt Ltd, has been approached by Itt plc in respect of its making a takeover bid for Gilt Ltd. Itt plc has given Harry what is described as a facility fee of €50,000 for ensuring that the takeover is successful.At the next board meeting Harry convinces the other directors that the takeover bid is in the long-term interest of Gilt Ltd, but they are concerned that the holders of the majority of the issued share capital will not approve of the takeover.In order to ensure the success of the takeover, the directors of Gilt Ltd agree that they should allot suffi cient new shares to Itt plc to ensure that a new majority of members will support the takeover.After the allocation of the shares to Itt plc a general meeting is called to consider the takeover and it is approved, with Itt plc voting in favour.May, a substantial shareholder in Gilt Ltd has subsequently found out about the actions of Itt plc, Harry and the other directors.Required:Advise May as to the legality of the share allotment and as to what action can be taken against Harry. (10 marks)
