atans1

And SGX wants to list dual-class shares?

In Corporate governance on 30/08/2016 at 1:50 pm

When we don’t have protection of US style laws and culture? Singapore does not have, or want, a culture of class-action lawsuits as in the United States. That’s a key feature that helps to keep founder shareholders in check.

http://blogs.reuters.com/breakingviews/2016/08/24/singapore-eyes-last-trick-in-the-book-to-win-ipos/

Even in the US with a culture of class-action lawsuits, there can be problems with dual-class shares.

A dual-class stock system does not necessarily allow the founder to build a company. It can be abused as the founder’s ownership level declines and he giveshimself private benefits. And a public corporation should not be run forever NYT Dealbook reports:

The Deal Professor’s Lessons from the Viacom Dispute

After Viacom’s ownership saga, Steven Davidoff Solomon offers some lessons that can still be put into use:

1. Remember what your end-game is and what is reasonable given your situation. Philippe P. Dauman, the outgoing chief executive, seems to have failed to have recognized that he faced an uphill fight — despite having practiced law himself. He also seemed to be unaware of the public-relations aspect of his fight over Viacom.

2. Be aware of your own loyalties — corporate officers are better off leaving their loyalty with the company, where it legally belongs.

3. Bad governance breeds bad conduct. In the case of Viacom, everyone shares the blame, but Sumner M. Redstone particularly so. He ran Viacom as his personal fief.

4. Litigation has its uses, but using it as a corporate weapon can lay waste to a company.

5. A dual-class stock system does not necessarily allow the founder to build a company. It can be abused as the founder’s ownership level declines and he gives himself private benefits. And a public corporation should not be run forever as a family business. [Emphasis mine]

Let us now hope that those involved in the dispute devote just as much energy to fixing the company’s governance problems and ensuring Mr. Redstone is appropriately cared for.

Sigh the FTs in SGX are screwing us again OL, OK I know the CEO and chairman are true blue S’poreans. But there are FTS all around them.

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