The New Zealand Shareholders Association says it will oppose security software developer Wynyard's plans to sell new shares below a previously announced price floor of $2 a share when a meeting of investors is held next week.
NZSA chairman John Hawkins said there was no clear information about how Wynyard would protect existing investors and his members faced an information "black hole".
Wynyard shareholders agreed to let the board sell 15 million shares at a price of at least $2 at a special meeting in December after the company drummed up investor interest during a roadshow.
But since then global equity markets have been volatile. At the meeting next Thursday the board will ask shareholders to approve the share placement it conducted in June 2015, when it raised $45 million.
That would allow the company to issue more shares without the $2 minimum price limit.
This month, chairman Murray Horn wrote to investors to explain the move.
"Global volatility crystallised earlier than directors expected and these unforeseen market conditions are disrupting the company's ability to raise capital at this price at this time from the investors that expressed interest in late 2015.
"Wynyard is a growth company that requires further capital in the short and medium term and continues to rely on support from shareholders and investors."
But the NZSA said far more explanation was needed.
In particular they're concerned Wynyard has given no indication of the circumstances or price at which it will issue new shares.
It says the board would be able to offer large parcels at potentially large discounts, heavily diluting existing investors.
The NZSA said it had engaged with the company and made several suggestions. If a reasonable solution was offered, the association would back the resolution at the meeting.
Wynyard's shares closed up 10c yesterday at $1.48.