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Ronak Mehta , ACA

Self-Serving Motives – Mockery of Corporate Governance?

Self-Serving Motives – Mockery of Corporate Governance?

By | Corporate Governance, Quality of Earnings | No Comments
Summary

  • The company kept very low dividend payout ratio over the years, even when it had no re-investment/acquisition opportunities. It distributed entire cash on its balance sheet as a special dividend when the parent’s tax rate reduced.
  • The company provides significantly higher credit period to the parent irrespective of the impact on its own working capital.
  • Generated negative IRR on a contract manufacturing plant started exclusively for a fellow subsidiary.

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