520. Existing shareholders' right of pre-emption
(1) A company must not allot equity securities to a person on any terms unless—
(a) it has made an offer to each person who holds ordinary shares in the company to allot to him on the same or more favourable terms a proportion of those securities that is as nearly as practicable equal to the proportion held by him of the ordinary share capital of the company, and
(b) the period during which any such offer may be accepted has expired or the company has received notice of the acceptance or refusal of every offer so made.
(2) Securities that a company has offered to allot to a holder of ordinary shares may be allotted to him, or anyone in whose favour he has renounced his right to their allotment, without contravening subsection 520(1)(b).
(3) Shares held by the company as treasury shares are disregarded for the purposes of this section, so that—
(a) the company is not treated as a person who holds ordinary shares, and
(b) the shares are not treated as forming part of the ordinary share capital of the company.