Statutory pre-emption — non-cash consideration exclusion (ss.561, 565)

Ruislip Logistics Ltd is a private company with one class of ordinary shares. Singh holds 3,000 of its 12,000 issued ordinary shares. The company wishes to acquire a fleet of vans owned by Tara, an unconnected third party. The board has agreed with Tara that, instead of paying cash, the company will allot her 4,000 newly issued ordinary shares, fully credited as paid up, in exchange for the transfer of the vans to the company. The articles are silent on pre-emption and the directors have authority to allot. Singh objects, arguing that the company must first offer him 1,000 of the new shares, on the same terms and open for at least 14 days, before any shares are allotted to Tara.