So here there can be multiple ways and instances where companies have shortchanged minorities. It can be by selling a company’s subsidiary to the promoter at a dirt cheap valuation or buying a promoter-owned entity at euphoric valuations. Indian promoters are famous for siphoning cash. Recently came across a company, where the promoter of the listed Indian company lent his friend an amount of 5 crores which was an interest-free debt. First of all, one should question why has this money been given out interest-free because this money also belongs to shareholders. Finally, after 2 years this loan gets written off and this is the silent looting of shareholder wealth.So as an investor, the first job when you come across any company is to check whether the company is minority friendly or not.
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