A man with just A$11 (S$12.31) worth of shares in Virgin Australia claimed that Singapore Airlines and two other carriers could have an unfair influence in the company after committing millions to increasing their stakes.
Mr Philip Mayne applied to the Australian Takeovers Panel (ATP), a Melbourne-based regulatory body, to have the circumstances of a share exercise last month declared unacceptable.
But its three-member panel rejected him.
In its updated decision grounds released on Monday, it stated that the arrangement would "maintain the relative positions of each of the three largest shareholders and would not disadvantage retail shareholders on a proportionate basis".
Virgin Australia had offered its smaller shareholders the opportunity to purchase shares worth A$350 million.
But when the exercise closed earlier this month, only about a quarter were taken. The rest ended up being acquired by SIA, Etihad and Air New Zealand.
This boosted SIA's ownership of Virgin Australia from 19.8 per cent to 21.6 per cent.
Air New Zealand and Etihad saw their interests increase to 25 per cent and 21.7 per cent respectively.
Mr Mayne, an Australian, had argued that the exercise by Virgin would have "a material control effect" on the company - but the ATP disagreed.
"We consider that it is not against the public interest to decline to make a declaration" of unacceptable circumstances, it said.
Mr Mayne has owned 29 shares worth about A$11 in total since 2008, and Virgin had argued there was a "serious question whether this insignificant interest gives him standing".
The ATP held he had the standing to file the objection.
Mr Mayne was not alone in expressing reservations about the deal. Australian national carrier Qantas' chief executive officer, Mr Alan Joyce, also raised concerns about the growing involvement of foreign airlines in the Australian aviation industry.
He had said this would allow rivals like SIA access to traffic rights and markets that should rightly be reserved for genuine Australian carriers.
Virgin Australia CEO John Borghetti explained that the exercise to raise capital was "designed to enhance liquidity and the gearing position of Virgin Australia to ensure we are in a stronger position moving forward".
The 184.4 million additional shares issued commenced trading on the Australian Stock Exchange on Wednesday.
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