Corporate Restructuring and Governance Implications: A Case Study of the Guoco Group

Welcome:
Guest

Journal of Asia Business Studies

ISSN: 1558-7894

Online from: 2007

Subject Area: Regional Management Studies

Content: Latest Issue | Latest Issue RSS | Previous Issues

Options: To add Favourites and Table of Contents Alerts please take a Emerald profile

Document Information:
Title:	Corporate Restructuring and Governance Implications: A Case Study of the Guoco Group
Author(s):	Yuanto Kusnadi, (City University of Hong Kong)
Citation:	Yuanto Kusnadi, (2009) "Corporate Restructuring and Governance Implications: A Case Study of the Guoco Group", Journal of Asia Business Studies, Vol. 4 Iss: 1, pp.39 - 48
Keywords:	Corporate governance, Corporate restructuring
Article type:	General review
DOI:	10.1108/15587890980001518 (Permanent URL)
Publisher:	Emerald Group Publishing Limited
Abstract:	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.