... of the company, then we have to examine it far more carefully. The question to ask is if an intelligent man and honest person in the director's position would have reasonably believed that it was for the benefit of the company. Directors have to exercise their powers for the benefit of the company as well as for the purpose for which the power was given. In the case of Piercy v S.Mills & Co. Ltdiv, the directors of a small company issue shares in order to stop a take over by Mr Piercy. Court held that the director's powers to issue shares are being misused so a breach of director's duty and the issued share was set aside. In the case of Hogg v Cramphorn Ltdv , where directors issued new shares in order to stop a take over bid, it was held that the power to issue shares was ...

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