If so, wouldn't this be unfair against shareholders as this would devalue their shares and voting rights?
Not in australia
Changes in shareholding of private companies require the approval of all existing shareholders.
However, in general (for private and public companies), shares are issued for something of value to the company - cash or something else - and therefore of value to the existing shareholders. The directors (and shareholders in private companies) need to decide if this is in the company’s best interest.