Exactly, minority shareholders are at the mercy of stingy managers/directors.nirowat wrote:problem is cannot trust the management or the directorship to utilise the money well.
likely to siphon it off somewhere and the poor small holder will not see any of it.
As Jiggy mention, best example is RENU, after all the cash reserves accumulated, they cut the dividend payment !
In the case of SHAW, they will end up showing an EPS of around 200 for the quarter ended December (since the land sale went through in October), realistically they will need to pay a dividend of 50 to 100 during 2014 otherwise this will be a lost case just like RENU. The bigger shareholders like Elgin, Gulamhusein, pierre lanka and rosewood will need to push the directors and unlock the value.
The good thing with SHAW is that an NAV of 650 can be brought for around 250 which is a safer deal than RENU (NAV of480 going for 250)