write:The project would cost $100 million. The Board of LEC enters into an agreement with Nolkswagon in terms of which LEC will issue Nolkswagon with 20 000 ordinary shares in LEC in ret

and has been purchasing LEC shares on the open market. Global Car Parts Ltd has already secured a 40% holding in LEC. LEC has $150 million in cash reserves. LEC is currently engaged in negotiations with Nolkswagon Ltd over a proposed joint venture to manufacture German car parts in Australia. The project would cost $100 million. The Board of LEC enters into an agreement with Nolkswagon in terms of which LEC will issue Nolkswagon with 20 000 ordinary shares in LEC in return for $200 million in capital. The Board of LEC issues the shares. (Because of its size
the issue is exempt from the disclosure requirements under Chapter 6D of the Corporations Act 2001 (Cth).) As a result of the share issue
Global Car Parts Ltd’s holding in LEC is reduced to 33% and it fails in its attempt to obtain a majority holding in LEC. LEC has received a letter from a firm of solicitors who act for Global Car Parts Ltd
threatening legal action against LEC.