Directors sans shares
THE High Court’s decision published in all dailies on May 22 endorsed the notification of the Security and Exchange Commission that sponsor-directors must have minimum specified shareholding in the company they endorse. This is quite logical and justified and in my personal opinion, the minimum shareholding should be more than what the SEC has laid down.
One fails to imagine how sponsor-directors will have no share liability of the company they sponsor while they are free to guide and direct the sponsored company to purchase goods and services from sources, or reduce selling prices. In either manner, the sponsor-directors could have a profit motive.
Such negative and subjective decision making by these directors can lead to losses for the new company, while fattening the purse of the sponsor-directors.
An ex-company director
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