15/03/2024
15/03/2024
KUWAIT CITY, March 14: The issue of small shareholders being the last to know about the realities within companies is a significant concern, despite existing laws emphasizing the importance of disclosing essential information transparently, reports Al-Jarida daily. There are several reasons why influential information remains restricted to insiders and not disclosed to others such as by:
Delaying Tactics
Some companies deliberately provide misleading data and information to prolong procedures and exploit legal loopholes. This prolongation allows them to avoid addressing difficult financial conditions or other challenges they may be facing.
Debt Restructuring Plans
Companies may call for general assemblies to review debt structuring and capitalization plans, even if they know that these plans are likely to fail. They may bet on buying time and passing on the crisis to avoid immediate repercussions.
Concealing Strategic Issues
Financially distressed companies with faltering projects abroad may hide critical facts from shareholders. They may evade inquiries or provide vague responses, delaying the provision of necessary information.
Disagreements and Conflict
Some groups neglect to present the facts of internal disagreements or conflicts, knowing that litigation processes can take years. This delay allows them to avoid immediate accountability or pressure from shareholders.
Seizure of Assets
Companies may face substantial asset seizures through legal means, exploiting administrative influence and control of the Board of Directors. Approvals may be passed under questionable circumstances, leading to the loss of assets.
Continuous Resignations
Continuous resignations from board members or executives, often due to financial reasons or disagreements, can harm the company and its shareholders. This turnover may indicate underlying issues within the company’s management.
Manipulative Practices
Companies may manipulate share prices without justifying the reasons behind significant changes. Hollow disclosures may mislead shareholders and regulatory authorities.
Financial Violations
Some companies may engage in financial violations without disclosing them. Mass manipulation operations may occur without appropriate measures being taken. Opaque Management -- In some cases, companies are managed by one party behind the scenes, with the Board of Directors unaware of operational details. This lack of transparency allows influential information to be controlled and hidden.
Sale of Foreign Assets
Companies may sell foreign assets to benefit specific parties, obscuring the entity’s operations and preventing shareholders from tracking those assets.
Overall, these practices highlight the need for increased transparency and accountability within companies to ensure that all shareholders have access to essential information. The regulatory authorities should closely monitor and address instances of non-disclosure and manipulation to protect the interests of shareholders and investors.