Institutional EYE

Commentary on Corporate Governance Issues

Cummins India Limited: The Maruti Gujarat plant by stealth

A very egregious practice catches-on and the hollowing out of MNC’s listed in Indian begins. Even as the Maruti management was completing its victory lap, having got shareholder approval for buying assembled cars from a 100% Suzuki to be set up in Gujarat, India, and in the process converting itself into a marketing extension of its Japanese parent, Cummins India Limited has embraced this business model. Suzuki no longer has a patent over this egregious idea. While opposing the resolution allowing Suzuki to set-up the Gujarat facility, IiAS in its open letter to Maruti shareholders had said that implications that extend beyond commercial arrangements and ‘equally important are the implicatio

Prepare to unfriend promoters

Last month, Facebook announced that its board of directors had "approved a proposal to amend and restate our existing certificate of incorporation to create a new class of non-voting capital stock, known as the Class C capital stock. If the proposal is approved, we intend to issue two shares of Class C capital stock as a one-time stock dividend in respect of each outstanding share of our Class A and Class B common stock. This proposal is designed to create a capital structure that will, among other things, allow us to remain focused on Mr. Zuckerberg's long-term vision for our company and encourage Mr. Zuckerberg to remain in an active leadership role at Facebook". Facebook currently has t

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