CHAPTER 7

Protecting Minority Investors

Introduction

What are minority investors? Minority investors have a minority interest in a company, which is a percentage of ownership that is significant but does not give the holder the right to control the company. What is the meaning of protecting minority investors? The protection of minority investors indicators measure the strength of minority shareholder protection against the misuse by directors of corporate assets for their personal gain. They also measure shareholders’ rights, governance safeguards, and corporate transparency requirements that reduce the risk of abuse. Why make a minority investment? Among those hundreds of thousands of privately held companies, many seek new or expanded market ...

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