Adam, Brian, Charles and David each held 25% of the issued share capital of ABCD Ltd. Adam has recently issued further shares to himself in order to increase his voting power.
Which of the following is incorrect?
A . The share issue is automatically invalid.
B . The shareholders may ratify the share issue by ordinary resolution.
C . The shareholders may challenge the validity of the share issue using Section 994 of the Companies Act 2006, on the ground that the issue is "unfairly prejudicial to the interests of the shareholders".
D . The company may proceed against Adam for breach of fiduciary duty.
Answer: A