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Article
Publication date: 1 January 2013

Khurram Parvez Raja

The unfair prejudice remedy as contained in s.290 of the Companies Ordinance 1984 entitles a member with a shareholding of twenty percent or more to petition to the court…

Abstract

Purpose

The unfair prejudice remedy as contained in s.290 of the Companies Ordinance 1984 entitles a member with a shareholding of twenty percent or more to petition to the court for suitable and appropriate court orders in circumstances where the member has been unfairly prejudiced. The major difficulties and complexities emerging from the examination of s.290 relates to (but not limited to) locus standi, high cost of litigation due to the length and complexity of the unfair prejudice litigations, lacunas in share valuation, cumbersome court procedures, low quality of pleadings, unethical conduct of lawyers, etc. The purpose of this paper is to shed light on these topical questions. It is contended that the legislature and the courts will have a strong role to play in providing clarity and certainty to the law.

Design/methodology/approach

The first part provides a brief overview of the statutory unfair prejudice remedy contained in s.290. The second part discusses the concept of unfair prejudice in the United Kingdom and its difficulties. The third part provides a framework of the unfair prejudice remedies available under s.290 and discusses the inefficiencies and shortcomings of the remedy.

Findings

This article concludes that the statutory unfair prejudice remedy in Pakistan is inefficient and inadequate to redress personal and corporate wrongs in an unfair prejudice petition. The deficiencies of the statutory unfair prejudice remedy pose a challenge to the minority shareholders and the overall corporate governance and corporate law regime in Pakistan.

Originality/value

This article sheds light on the complexity and difficulty of the statutory unfair prejudice remedy, as contained in s.290 of the Companies Ordinance 1984 from a comparative law perspective.

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Article
Publication date: 10 July 2009

James Kirkbride, Steve Letza and Clive Smallman

The purpose of this paper is to compare the response in the UK, the USA and China to the need to provide effective protection in law to disgruntled minority shareholders.

Abstract

Purpose

The purpose of this paper is to compare the response in the UK, the USA and China to the need to provide effective protection in law to disgruntled minority shareholders.

Design/methodology/approach

The study draws upon official comment and case law across the three jurisdictions in order to assess the scope and availability of minority actions.

Findings

The importance of shareholder rights through alternative actions is an important aspect of controlling the behaviour and actions of the Board of Directors and an important part of corporate governance. This paper seeks to compare the development and scope of derivative rights in the UK, the USA and in China and provides an assessment and insight into the differences in approach and in the political and legal structures with the consequent likely impact on the role and contribution of derivative claims in the control and governance of Boards in the different jurisdictions.

Originality/value

The study should prove of interest to scholars of comparative corporate law.

Details

International Journal of Law and Management, vol. 51 no. 4
Type: Research Article
ISSN: 1754-243X

Keywords

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Article
Publication date: 13 March 2017

Ernestine Ndzi

This paper aims to examine the Salomon principle of separate legal personality and its impact on the regulation of directors’ remuneration in the UK. The aim of the paper…

Abstract

Purpose

This paper aims to examine the Salomon principle of separate legal personality and its impact on the regulation of directors’ remuneration in the UK. The aim of the paper is to explore the Salomon principle to determine whether it serves as a driving factor for directors’ remuneration levels. The paper will also examine the restrictive approach of the courts to move away from the principle and their reluctance to get involved in directors’ remuneration issues of a company. The paper explains the Salomon principle, describes the nature of the problem on directors’ remuneration and provides an analysis on how the Salomon principle impacts on the directors’ remuneration.

Design/methodology/approach

The paper reviews case law, statutory provisions and academic opinions on the directors’ remuneration and the concept of separate legal entity. The paper critically reviews the impact of the concept of separate entity on directors’ remuneration.

Findings

The paper finds that the courts are reluctant to come away from the concept of separate legal personality as well as reluctant to get involved with directors’ remuneration. This reluctance of the court makes the concept of separate legal personality to act as one of the drivers of directors’ remuneration.

Originality/value

The paper offers a different explanation into why directors’ remuneration continuous to be an issue in the UK. It points out that the concept of separate legal personality is a potential driver of directors’ remuneration in the UK.

Details

International Journal of Law and Management, vol. 59 no. 2
Type: Research Article
ISSN: 1754-243X

Keywords

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Article
Publication date: 23 August 2019

Navajyoti Samanta

For the past two and half decades, there has been a marked shift in the corporate governance regulations around the world. The change is more remarkable in developing…

Abstract

Purpose

For the past two and half decades, there has been a marked shift in the corporate governance regulations around the world. The change is more remarkable in developing countries where countries with little or no corporate governance regime have adopted “world class” standards. While there can be a debate on whether law in books actually translates into law in action, in the meantime it might be interesting to analyse the law in books to understand how the corporate governance regime has evolved in the past 20 years. This paper quantitatively tracks 21 countries, most of them being developing and emerging economies, over a period of 20 years. The period covers 1995 to 2014; thus, it traverses the pre and post crisis period in 1999 and 2008. Thus, the paper also provides a snapshot of the macrolegal changes that the countries engage in hoping to stave off the next crisis. The paper uses over 50 parameters modelled on the OECD Principles of Corporate Governance. The paper confirms the suspicion that corporate governance norms around the developing economies are converging on shareholder primacy end of the continuum. The rate of convergence was highest just before the financial crisis of 2008 and has since then slowed down.

Design/methodology/approach

The paper uses data collected from experts. They filled up detailed questionnaire which quizzed them on the rules relating to corporate governance norms in their country and asked them to retrospectively check their data every five years for the past 20 years. This provided an excellent overview as to how the law has evolved in the past two decades on corporate governance. The data were then tabulated using a scoring sheet and then was put together using item response theory (IRT) which is a Bayesian method similar to factor analysis. The paper then follows a comparative approach using heatmaps to analyse the evolution of corporate governance in developing countries.

Findings

Corporate governance norms around the developing economies are converging on shareholder primacy end of the continuum. The rate of convergence was highest just before the financial crisis of 2008 and has since then slowed down.

Originality/value

This is the first time that corporate governance panel data analysis has been carried out on top developing countries across so many parameters for such a long period. This paper also uses Bayesian IRT modelling to analyse the evolution which is novel in its approach especially in the corporate governance literature. The paper thus provides a clear view on the evolution of corporate governance norms and how they are converging on a particular ideology.

Details

Corporate Governance: The International Journal of Business in Society, vol. 19 no. 5
Type: Research Article
ISSN: 1472-0701

Keywords

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Article
Publication date: 18 September 2007

Philip Lawton

The paper aims to explore the extent to which the legal experience of minority shareholder actions in Hong Kong supports the sociological model of the Chinese family firm…

Abstract

Purpose

The paper aims to explore the extent to which the legal experience of minority shareholder actions in Hong Kong supports the sociological model of the Chinese family firm as developed by Wong Siu‐lun and reports some preliminary findings for the period 1980‐1995.

Design/methodology/approach

This paper is based upon the analysis of 275 minority shareholder petitions in the High Court of Hong Kong between the years 1980 and 1995 inclusive. It also draws upon material from a questionnaire sent to law firms involved in those petitions and interviews with members of the Hong Kong judiciary with experience of hearing minority shareholder cases, members of the legal profession and accounting and company secretarial professions directly or indirectly involved in the administration of companies in Hong Kong and regulators.

Findings

The findings indicate that the problematic early, emergent stage of the model as described by Wong Siu‐lun is quite accurate. Whilst there is considerable support for some aspects of the model of the Chinese family firm, the experience indicates a number of complex dynamics at play, some of which the model does not take into account. However, the findings, at least by implication, do point to the cohesive strength of the Chinese family firm with occasional fault lines resulting in some “disputes” of earthquake proportions which may rumble on in some cases for years.

Practical implications

The findings demonstrate the usefulness of lifecycle modeling of the family and other type of corporate firm. It also demonstrates some of the complex subtleties at play. The findings also have implications for the law matters thesis of La Porta et al.

Originality/value

This is one of the first studies to actually examine the legal experience of minority shareholder protection in a particular jurisdiction (Hong Kong) by examining the petitions and writs actually filed and relating them to a sociological model of the Chinese Family firm.

Details

Managerial Law, vol. 49 no. 5/6
Type: Research Article
ISSN: 0309-0558

Keywords

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Article
Publication date: 1 February 1997

Flora Page

Fraud is not yet universally recognised or understood as a crime, in the way that theft is. All sectors of our society recognise shoplifting as a crime, whereas an…

Abstract

Fraud is not yet universally recognised or understood as a crime, in the way that theft is. All sectors of our society recognise shoplifting as a crime, whereas an exaggerated insurance claim tends to be seen more as a matter of personal morality than public law and order.

Details

Journal of Financial Crime, vol. 4 no. 4
Type: Research Article
ISSN: 1359-0790

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Article
Publication date: 27 June 2019

Shouvik Kumar Guha, Navajyoti Samanta, Abhik Majumdar, Mandeep Singh and Ananya Bharadwaj

The past few decades have seen a gradual convergence in corporate governance norms the world over, entailing a discernible shift towards shareholder primacy models. It…

Abstract

Purpose

The past few decades have seen a gradual convergence in corporate governance norms the world over, entailing a discernible shift towards shareholder primacy models. It holds particularly true of developing countries, many of which have steadily amended corporate governance norms to enhance the scope of shareholder rights. This is usually justified through the rationale that increasing protection for foreign investors and shareholders would mean greater investment in capital market and overall financial market development. In India, the shift coincides with a series of fundamental economic and financial policy reforms initiated in the 1990s: collectively and loosely referred to as “liberalisation”, this process marks a paradigm-shift from a tightly controlled welfare economy to one considerably more laissez-faire in its orientation. A fallout of which was that the need to attract and sustain foreign investments acquired an unprecedented significance. The purpose of this paper is to help the readers understand in this larger context the corporate law reform initiatives in India, particularly those pertaining to shareholder rights and allied issues.

Design/methodology/approach

This paper empirically tests the hypothesis that enhanced shareholder protection leads to greater levels of investments, and financial developments generally. It then uses regression analysis to detect if the change in corporate governance, making it more shareholder-friendly, has had any effect on growth in financial market. It is divided into two broad parts. The first tracks the evolution of corporate governance norms in India. A robust qualitative and quantitative analysis is used to determine the tilt towards a shareholder primacy regime that Indian corporate governance regime now displays. The second chapter deals with the regression analysis where the outcome variable is financial market growth, and explanatory variable is the change in the governance regime with relevant control variables.

Findings

The authors find that change in shareholder primacy corporate governance has little effect on financial market growth in India. The authors would suggest that instead of changing the law in books, more emphasis should be given to implement those regulations and increase the overall rule of law.

Originality/value

This is the first time that such a wide-scale study has been conducted in India, using Bayesian methods. It ought to be of immense value to professionals and academics both.

Details

Corporate Governance: The International Journal of Business in Society, vol. 19 no. 5
Type: Research Article
ISSN: 1472-0701

Keywords

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Article
Publication date: 25 February 2014

Manoj Joshi and Apoorva Srivastava

The case aims to deal with multi generation entrepreneurship. Families are about people and businesses are about money, therefore, conflict between the two is inevitable…

Abstract

Purpose

The case aims to deal with multi generation entrepreneurship. Families are about people and businesses are about money, therefore, conflict between the two is inevitable. Family-owned businesses develop competitive edges when they align values, vision, strategy, investment and governance to make both family and business activities more professional and mutually supportive. It is a belief that “treating the business like a family”, driven by values and concern for human needs, creates an organization with motivated people working together to create long-term value. Jitesh Ghai is the MD of Panchamrit Asbestos Ltd (PAL), which stands for PAL. Jitesh has an “experiential learning” with the cement sheet business and has understood the nuances of the business. It is supposedly required that PAL ought to professionalize owing to market infeasibility. Shashwat, his son has diversified interests and therefore desires to spin-off to “Big Apple”.

Design/methodology/approach

The case is based on research and secondary information, which has been tested several times, while filling the case gaps during the process. To authenticate information, multiple sources (vendors and customers) of information have been used.

Findings

There is a dilemma between the father-son relationship and decision to professionalise or spin-off! It is understood that in multigenerational business, it is not necessary that the subsequent generation keep the same business, but must preserve wealth and traditions.

Research limitations/implications

The findings are based on observations on one organisation and research carried through secondary sources, which may limit to theory building.

Practical implications

An enterprise largely competes on the basis of available talent, knowledge, competency and capability. Therefore, knowledge must be managed. For survival and growth, business transition must be handled effectively.

Originality/value

The case is original with the business family in its second generation striving to survive.

Details

Journal of Entrepreneurship in Emerging Economies, vol. 6 no. 1
Type: Research Article
ISSN: 2053-4604

Keywords

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Article
Publication date: 23 September 2019

Stefanie Pletz and Joan Upson

This paper aims to analyse normative corporate governance evolution in the UK between 1995 and 2014 against the benchmark of Organisation for Economic Co-Operation and…

Abstract

Purpose

This paper aims to analyse normative corporate governance evolution in the UK between 1995 and 2014 against the benchmark of Organisation for Economic Co-Operation and Development (OECD) regulatory principles.

Design/methodology/approach

Methodologically, the authors conduct an empirical, longitudinal data set analysis of the formative years of UK normative corporate governance development between 1995 and 2014. We provide a qualitative discussion of the empirical evidence that links the type of UK regulatory corporate governance development to financial market growth thereby adopting a mixed approach based on quantitative and qualitative research methods.

Findings

The authors find that compared to the OECD model of corporate governance, the UK model is less rigid following a more self-regulatory approach based upon a “comply or explain” paradigm. Thus it is scored below corporate governance systems that follow a compulsory implementation model. However, even with such “low” tilt towards formal shareholder primacy norms, the UK has the best performing financial market. As a quasi-empirical study, the authors suggest that there are several historical and economic reasons for this, which together with a robust rule of law in the UK contribute to this performance – and the law especially the type or tilt is less relevant.

Originality/value

This is the first of its kind empirical, longitudinal data set analysis with qualitative elements that links empirical evidence to regulatory developments in the wider context of UK corporate governance evolution.

Details

Corporate Governance: The International Journal of Business in Society, vol. 19 no. 5
Type: Research Article
ISSN: 1472-0701

Keywords

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Article
Publication date: 18 July 2019

Andreas Rühmkorf, Felix Spindler and Navajyoti Samanta

This paper aims to address the evolution of corporate governance in Germany with a particular regard to whether there can be observed a gradual convergence to a shareholder

Abstract

Purpose

This paper aims to address the evolution of corporate governance in Germany with a particular regard to whether there can be observed a gradual convergence to a shareholder primacy corporate governance system.

Design/methodology/approach

To investigate a potential shift of the German corporate governance system to an Anglo-American tiled corporate governance system, the authors have empirically assessed on a polynomial base 52 separate company and corporate governance variables for 20 years (1995-2014).

Findings

This research suggests that a gradual convergence has taken place prior to the global financial crisis. However, the results suggest that the convergence process experienced a slowdown in the aftermath of the global financial crisis, which may be linked to the stability of the German corporate governance system during the global financial crisis and the political environment during this time.

Originality/value

This paper contributes to the research by not only analysing the development of the German corporate governance system but also identifying new reasons for this development and explaining why a new convergence process may be observed in the future again.

Details

Corporate Governance: The International Journal of Business in Society, vol. 19 no. 5
Type: Research Article
ISSN: 1472-0701

Keywords

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