Sharda Motors - Red flag?

Discussion in 'Ask A Query About Your Stock Picks And Portfolio' started by Raghav Behani, Dec 5, 2018.

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Is it justified for MD's Mother to withdraw Rs 4.5 Crores as salary from the company?

This poll will close on Jan 4, 2019 at 1:17 PM.
  1. Yes

  2. No

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  1. Raghav Behani

    Raghav Behani New Member

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    Sharda Motors is run by the Relan family, headed by Mr Ajay Relan (MD). The Mother of the Managing Director is 82 years old - Mrs. Sharda Relan.

    She is withdrawing a salary of ~ Rs 4.5 Crores+ from the company. The entire Net Profit of the company is Rs 88 Crores (consolidated). With due respect to the Mother, it is ~ 5% of the net profit that belongs to all shareholders being taken away from the business with no value addition. The promoters controls ~ 73% of the company.

    Would you justify / be alright with such practices in a company?
     

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