Tunneling

Working Paper

Optimally Restrained Tunneling: The Puzzle of Controlling Shareholders’ “Generous” Exploitation in Bad-Law Jurisdictions

Although controlling shareholder agency problems have been well studied so far, many questions still remain unanswered. In particular, an important puzzle in “bad-law” jurisdictions is: why some controlling shareholders (“roving controllers”)...Read more

Sang Yop Kang
19 July 2018

RPTs in SOEs: Tunneling, Propping, and Policy Channeling

This essay, prepared for a volume on related-party transactions (RPTs), explores the economic, legal and policy challenges associated with RPTs in state-owned enterprises (SOEs). We show that RPTs in SOEs differ from RPTs in privately owned...Read more

Curtis J. Milhaupt
Mariana Pargendler
10 March 2018

The Effect of Minority Veto Rights on Controller Tunneling

A central challenge in the regulation of controlled firms is curbing controller tunneling. As independent directors and fiduciary duties are widely seen as not up to the task, a number of jurisdictions have given minority shareholders veto rights...Read more

Jesse Fried
Ehud Kamar
Yishay Yafeh
19 February 2018

Related Party Transactions: Policy Options and Real-World Challenges (With a Critique of the European Commission Proposal)

This paper provides a legal and policy analysis of transactions between a corporation and one of its ?related parties.? It first highlights the reasons why related party transactions (?RPTs?) are so common around the world. Next, it better...Read more

Luca Enriques
01 October 2014

When Heirs Become Major Shareholders: Evidence on Tunnelling and Succession through Related-Party Transactions

In family firms, the succession of controlling equity stake to next generation is an issue of paramount importance. This, however, can be a major challenge in the presence of heavy inheritance or gift tax burden (high tax rate and absence of tax-...Read more

Woochan Kim
01 March 2014

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