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What are redeemable preference shares and from what source can they be redeemed?
- What are redeemable preference shares and from what source can they be redeemed?
2. Jasper holds Class A Ordinary shares that represents 10% of the issued share capital in Speedy Motors Pty Ltd. Jasper's shares were issued with a right to a dividend which is double that of other Class B Ordinary shares that represents 90% of the issued capital in the company and Maximus holds the majority of Class B Ordinary shares. Maximus wants to hold a general meeting of members to pass a resolution that will reduce the dividend of Jasper's Class A Ordinary shares down to the same level as the Class B Ordinary shares. Maximus discusses this with Geraldine Jones, who passed Company Law for Business exam last year. Geraldine advises Maximus that Jasper could successfully challenge such a resolution, if it was to be passed. Maximus on hearing this considers the advice and decides to abandon the idea.
Using the Corporations Act 2001 (Cth), advise Maximus on whether Geraldine is correct that Class A dividend rights could not be reduced by a resolution passed by the general meeting of members.