Gilt Co is a small company with an issued share capital of 100,000 $1 shares held by 100 members.Harry the managing director of Gilt Co has been approached by Itt Co in respect of its making a takeover bid for Gilt Co. Itt Co 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 Co, 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 agree that they should allot suffi cient new shares to Itt Co to ensure that a new majority of members will support the takeover.After the allocation of the shares to Itt Co, a general meeting is called to consider the takeover and it is approved, with Itt Co voting in favour.May, a substantial shareholder in Gilt Co has subsequently found out about the actions of Itt Co, 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)
