A small public company I own shares in recently advised the market it has completed a share issue to raise money. The new shares were priced significantly below the current market price and there was no mention of who bought them. There was no offer made to current shareholders.
What are the rules about this? Do current shareholders have any rights to new share issues before shares are sold cheaply to somebody else? Not surprisingly, the share price dropped on the announcement to roughly the price that was paid for the new shares.
In my past experience (with much larger companies that probably face more scrutiny) all current shareholders were given rights to new shares proportional to how many they currently own.