Corporate Restructuring and Governance Implications: A Case Study of the Guoco Group
I study a series of restructuring activities undertaken by Guoco Group Limited in recent years and the implications on minority shareholders. The divestment of Dao Heng Bank Group to DBS Group reaped substantial benefits for Guoco, including an enormous cash reserves to fund future investments. However, the cash hoard was not implemented to the best use by Guoco’s managers. Subsequently, Guoco was involved in a number of share buybacks schemes. The share-buybacks met strong resistance from the minority shareholders and eventually forced out the second largest shareholders. Guoco was also engaged in related party transaction involving its subsidiaries in the property development business. Overall, I find evidences suggesting that corporate restructuring activities enhance the controlling owner’s grip on the group at the expense of the minority shareholders.
Corporate governance, Corporate restructuring
Accounting | Asian Studies | Business Law, Public Responsibility, and Ethics | Corporate Finance
Corporate Governance, Auditing and Risk Management
Journal of Asia Business Studies
Corporate Restructuring and Governance Implications: A Case Study of the Guoco Group. (2009). Journal of Asia Business Studies. 4, (1), 39-48. Research Collection School Of Accountancy.
Available at: http://ink.library.smu.edu.sg/soa_research/1147