Jose, Jin and Mary Are the Directors of Umbrella Nation

Jose, Jin and Mary are the directors of Umbrella Nation Ltd - a company which sells umbrellas and raincoats. Luke owns 51% of the shares in Umbrella Nation Ltd and is threatening to call a meeting to vote Jose, Jin and Mary off the board. In order to avoid being removed from office by Luke, the board pass a resolution to issue a number of shares to Jin's friend Larry. After the shares have been issued, Larry owns 51% of the shares and Luke has been diluted to owning 25%. It would be highly unlikely that the directors have breached any of their duties to Umbrella Nation Ltd as directors have the power to issue shares.