A company issued new ordinary shares, which reduced the proportionate voting power of the existing preference shareholders. The preference shareholders argued their class rights had been varied. Following White v Bristol Aeroplane Co, what is the position?

Correct answer: D) The class rights have not been varied, because the rights themselves remain unchanged even though their practical value is affected

Explanation

The courts distinguish between the legal rights attached to shares and their enjoyment or value. In White v Bristol Aeroplane the issue of further shares affected the preference shareholders' relative voting strength but left their rights exactly as they were, so there was no variation requiring class consent. This literal approach gives limited protection to class members.