Pyramidal Ownership and Company Value: Evidence from Polish Listed Companies

This paper examines the effects of pyramidal ownership. Using the sample of 162 non-financial companies listed on the Warsaw Stock Exchange during the period 2010-2014, we verify the relation between the adoption of a pyramidal structure and company value. Specifically, we show that the link between pyramidal ownership and company value is more complex than previously thought addressing the aspect of ownership concentration and dual class shares. Our results indicate that the use of pyramids is associated with a higher value measured by Tobin’s Q, supporting the efficient monitoring hypothesis. Contrary to our expectations the combination of pyramidal ownership and dual class shares is correlated with lower Q. Finally, while the adoption of a pyramid by a majority shareholder does not impact firm value, the combination of a pyramid, ownership concentration and dual class shares is associated with higher Q. This finding suggests that the blockholder ownership outweighs the possible cost of excessive disproportionate ownership and that pyramids and dual class shares have different effects on company value.

Keabsahan Pembentukan Holding Badan Usaha Milik Negara Minyak dan Gas (BUMN MIGAS)

A business entity is referred to as a state-owned enterprise due to the State's position as the majority shareholder and as the holder of control over such business entity. Various government efforts in terms of maintaining their position in State-Owned Enterprises (BUMN) are carried out through restructuring or by forming new concepts in the form of holding companies. The concept of holding companies is a new concept that has not yet been regulated in Indonesian positive law. One of them is the government's efforts in developing the business of State-Owned Enterprises (BUMN) in the oil and gas sector. In the formation of oil and gas BUMN holding, this is done through several methods or stages that follow the provisions of positive Indonesian law on limited liability companies. However, not only that, the establishment of the holding of the Oil and Gas State-Owned Enterprises also needs to be reviewed from several other arrangements relating to the fact that there is no specific provision governing the position or process of forming the holding itself. Keywords: Holding; BUMN; Oil and Gas; Participation; Transfer; Transformation.AbstrakSuatu badan usaha disebut sebagai badan usaha milik negara disebabkan adanya kedudukan Negara sebagai pemegang saham mayoritas dan sebagai pemegang kendali atas suatu badan usaha tersebut. Berbagai usaha pemerintah dalam hal mempertahankan kedudukannya pada Badan Usaha Milik Negara (BUMN) dilakukan melalui bentuk restrukturisasi atau dengan membentuk konsep baru berupa holding company. Konsep holding company ini merupakan suatu konsep baru yang hingga saat ini belum terdapat pengaturannya dalam hukum positif Indonesia. Salah satunya yaitu usaha pemerintah dalam pengembangan bisnis Badan Usaha Milik Negara dalam sektor minyak dan gas. Dalam pembentukan holding BUMN Minyak dan Gas ini dilakukan melalui beberapa metode atau tahapan yang mengikuti ketentuan hukum positif Indonesia tentang Perseroan Terbatas. Namun, tidak hanya itu, pembentukan holding BUMN Minyak dan Gas ini juga perlu ditinjau dari beberapa pengaturan lain yang berkaitan dengan mengingat belum adanya ketentuan khusus yang mengatur kedudukan atau proses pembentukan holding itu sendiri. Kata Kunci: Holding; BUMN; Migas; Penyertaan; Pengalihan; Transformasi.

Shareholder use of CSR reports: an accountability perspective

Purpose This paper aims to investigate the extent of shareholder engagement and satisfaction with corporate social responsibility (CSR) reports of a Chinese-owned company compared to an Australian-owned company in the Australian mining industry. The study is motivated by the speed, extent and nature of Chinese foreign direct investment in Australia, the resulting negative social attitudes and the impact on the perceptions of a report’s credibility. Design/methodology/approach The authors conducted a survey of 202 minority shareholders of two Australian mining companies, one has a Chinese majority shareholder and the other an Australian majority shareholder. The responses highlight users’ comparative perceptions of corporate motivations for reporting, the level of perceived shareholder power over reporting decisions and the resulting propensity to read CSR reports. Findings The authors found that, contrary to decision-usefulness theory, which posits that users will read CSR reports only if they are deemed to be reliable, that perceptions of poor credibility and poor CSR performance actually result in a higher propensity to read the reports. This suggests that the minority shareholders of the Chinese acquired firm are using reports to monitor the level of corporate accountability. Originality/value The findings have implications for firms operating in politically or socially sensitive industries that are likely to use CSR reporting as a legitimising strategy. The paper also provides guidance to regulators in the provision of information, which is meaningful to minority shareholders.

PENGARUH PAJAK DAN TUNNELING INCENTIVE TERHADAP INDIKASI MELAKUKAN TRANSFER PRICING (STUDI KASUS PADA PERUSAHAAN LQ-45 YANG TERINDEKS DI BURSA EFEK INDONESIA)

ABSTRAKSalah satu indikasi perusahaan melakukan transfer pricing adalah menginginkan laba yang tinggi dengan membayar pajak yang rendah. Struktur kepemilikikan juga mempengaruhi manajemen untuk mengalihkan kekayaan kepada mereka sendiri atau pemegang saham mayoritas. Penelitian ini bertujuan untuk meneliti pengaruh pajak dan tunneling incentive terhadap indikasi melakukan transfer pricing pada perusahaan LQ 45 yang terindeks di Bursa Efek Indonesia. Sampel penelitian yang digunakan dalam penelitian ini adalah perusahaan LQ-45 yang terdaftar secara konsisten selama periode 2015-2019 dengan metode purposive sampling. Hasil dari penelitian ini menunjukkan bahwa pajak tidak berpengaruh signifikan terhadap indikasi transfer pricing, sementara tunneling incentive berpengaruh signifikan terhadap transfer pricing. Hal ini dibuktikan dengan nilai probabilitas 0.05 lebih kecil nilai probabilitas variabel pajak atau 0,05 < 0,13. Sementara nilai probabilitas 0.05 lebih besar dari nilai probabilitas variabel Tunneling incentive atau 0,05 > 0,01. Kata Kunci : Pajak, Tunneling Incentive, Transfer Pricing ABSTRACTOne indication of a company doing transfer pricing is wanting high profits by paying low taxes. The ownership structure also influences management to transfer wealth to themselves or the majority shareholder. This study aims to examine the effect of taxes and tunneling incentives on indications of transfer pricing on LQ 45 companies indexed on the Indonesia Stock Exchange. The research sample used in this study was LQ-45 companies that were consistently registered during the 2015-2019 period with the purposive sampling method. The results of this study indicate that taxes have no significant effect on transfer pricing indications, while tunneling incentives have a significant effect on transfer pricing. This is evidenced by the probability value of 0.05 which is smaller than the probability value of the tax variable or 0.05 < 0.13. While the probability value of 0.05 is greater than the probability value of the Tunneling incentive variable or 0.05 > 0.01. Keywords: Tax, Tunneling Incentive, Transfer Pricing

Reporting Significant Transactions with Affiliated Parties of Listed Companies on Stock Exchange

The complexity of related party transactions may lead to subjective interpretations of their reporting requirements. The objective of the paper is to examine the nature of significant transactions with related parties, how they were reported in accordance with legal requirements, and how the reported issues are correlated with the information in the annual financial statements. The study includes a synthesis of the evolution of specific regulations in Romania, as well as a centralization of the information highlighted in current reports published by entities and annual reports for 2017-2019, in order to identify issues to consider in the process reporting and publishing, in the case of companies carrying out such transactions. The sample consists of energy companies listed on the Bucharest Stock Exchange, included in the BET index, in which the state is the majority shareholder. The results of the study showed that reporting requirements have changed over time, both in terms of defining transactions and mandatory reporting ceilings. The analysis found different interpretations of companies on reporting obligations which can lead to difficulties in correlating and comparing data in the context of corporate transparency. The conclusion is that additional factors arise when reporting these types of transactions, which must be taken into account so that there is no impact on their completeness and accuracy, without affecting the auditor's opinion.

Unfair prejudice in United Kingdom Company Law

It is common that the majority shareholders in a corporation take action that unfairly prejudices the minority. A majority shareholder occupies a dominant position in the decision-making process of the company's affairs and can control the company with the principle of majority rule. In the process of company development, the interests of the majority shareholders may diverge from the interests of the company. In this case, the majority of shareholders may engage in unfair prejudice conduct that harm the interests of the company and minority shareholders for their own benefit. Consequently, to some extent, the principle of majority rule provides the possibility for the controlling shareholders to abuse voting rights, which often constitutes damage to the interests of minority shareholders. In addition, due to the reliance on the controlling shareholder, the directors tend to only take into account the interests of the majority shareholders, with the result that ignore the rights and interests of non-controlling shareholders. Especially in private companies, minority shareholders not only cannot sell their shares in the stock exchanges without restrictions to exit the company, but also may be subject to more severe oppression by the actual controller of the company. When minority shareholders cannot obtain relief within the company, it is necessary for aggrieved shareholders to bring an action against the majority shareholders to protect their rights. However, under the rule in Foss v Harbottle, shareholders only be allowed to sue if they meet the exceptions. Due to the limited application scope of these exceptions, the aggrieved shareholders are often unable to get timely and effective relief in practice. In response to this problem, statutory unfair prejudice provisions are introduced to balance the interests of majority shareholders and minority shareholders, and to prevent shareholder oppression in corporate governance. It emphasizes judicial intervention to protect the legitimate interests of shareholders. Compared with just and equitable winding up and derivative action, the unfair prejudice is regarded as a mechanism for minority protection as it covers a variety of remedies and leaves the court with greater discretion.

The Evaluation of the Communication of the Romanian Listed Companies with the Investors

Investor relations and financial communication are an ongoing challenge for a company's governance. Good communication and a close relationship with the investors contribute to strengthening the company's image and confidence of all stakeholders. Research on this topic has identified the requirements underlying the effective communication of companies, namely the existence of a department on investor relations, communication strategy, practices used, the content of the communication and its effects. The purpose of the paper is to make an assessment of the level of communication registered by the Romanian companies listed on the main market at the Bucharest Stock Exchange, starting from the assessment made by the Romanian Investor Relations Association in correlation with factors that may influence communication, respectively the trading category in which the company is listed, profitability, dividends paid, form of ownership of the majority shareholder, existence of non-financial reporting. From the proposed econometric model, it resulted that all the variables tested influence the level of communication, of which the trading category and the existence of non-financial reporting are most closely related. The level of communication with investors of Romanian companies is still low, but it has an upward evolution over time, so that at the next evaluation it will be possible to ascertain the amplitude of this evolution and other influencing factors will be identified.

Shareholders and Firm Value for Manufacturing Companies Listed in Indonesia Stock Exchange

Domestic institutional shareholders and foreign shareholders differently influence firm value. Using panel data from the manufacturing company listed in the Indonesia Stock Exchange (IDX), from 2014 to 2017, and regression analysis, these types of shareholders have a positive and significant impact on the firm value with an inverted U-shaped. The influence of domestic institutional share-holders to the firm value is more significant than that of the foreign shareholder indicated by the coefficient value from the regression results. The best combination of shareholders to obtain the optimum firm value are the domestic institutional shareholder no more than 35.26 percent and the foreign shareholder no more than 47.61 percent. The greater share ownership will increase shareholder intervention and benefit the majority shareholder. Effective monitoring improvements are needed so that the majority of shareholder intervention can be reduced.

How Does Mission Statement Relate to the Pursuit of Food Safety Certification by Food Companies?

Food safety has long been a major public concern in China. One question of the food processing industry’s emphasis on food safety social responsibility is whether a food processing company should pursue food safety certification for its products. As part of their corporate image, some food processing companies focus on food safety in their corporate mission statements. To enhance the legitimacy of a mission statement, as a guide for a firm, can provide food companies the legitimacy of perhaps pursuing food safety certification. However, we find that under different equity natures, the pressures on the normative legitimacy of the firm are different and the impact of mission statements on the acquisition of food safety certifications is also different. By analyzing the mission statement of companies in the Chinese food industry, we find that firms with a mission focusing on food safety concerns are more willing to pursue food safety certification. Moreover, compared to the firms with more distributed shareholder ownership, in firms where a majority shareholder has substantial control, the relationship between mission statements and the possession of food safety certification is stronger; compared to non-state-owned enterprises, in state-owned enterprise (SOEs), the relationship between firm mission statements of and the acquisition of food safety certification is stronger.