Citation(s) [1904] 2 Ch 108 | ||
Mosely v Koffyfontein Mines Ltd [1904] 2 Ch 108 is a UK company law case concerning shares. It held that if debentures are convertible into shares, they may not be issued at a price below the nominal share price.
Contents
Facts
Debentures, convertible into shares, were issued at a price 20 per cent below the nominal share price. Shares were trading at 4 shillings. Although debentures can be issued at a ‘discount’, it was argued that their convertibility meant that this contravened the rule against shares being issued at a discount, now found in CA 2006 section 580.
Judgment
Held, that even though it was not an avoidance scheme, this was caught by the no issuing shares at a discount rule.
References
Mosely v Koffyfontein Mines Ltd Wikipedia(Text) CC BY-SA