Question: Question: Would you call rainbow a shareholders activist group? why? Shareholder case study itwasalmostlikeacolegereunion,thoughatotalyunexpected,unplannedand unforeseenone.Thesevenfriendsmetafterfifteenyearswithnoideathattheywere goingtomeeteachotheratthisspotandhavesuchanimportantcommongroundto talkabout. Rasheed,Afzal,Iqbal,Naseem,Basit,OmarandWahidwereinthesameclassat Hailey'sColegeofCommerceLahore'sBCombatchthatgraduatedin1984.Theyal passedwithflyingcolorsandwentbacktotheirhometowns,exceptBasitwhowas fromLahore.Theyremainedintouchforashortwhilebutgradualylostcontactwith eachother.Andnow,alofsuddenalsevenofthemmetatthismeetingwhich connectedthemwithacommoncause.Whentheywereatcolegetheyusedtobeveryclosefriends.Infacttheywereso closethattheyhadcoinedanamefortheirgroup:RAINBOW.Thishadbeencleverly thoughtofbyWahidwhowasthepoetictypeamongthegroup.RAINBOWcarriedthe

Question:

Would you call rainbow a shareholders activist group? why?

Shareholder case study

itwasalmostlikeacolegereunion,thoughatotalyunexpected,unplannedand unforeseenone.Thesevenfriendsmetafterfifteenyearswithnoideathattheywere goingtomeeteachotheratthisspotandhavesuchanimportantcommongroundto talkabout. Rasheed,Afzal,Iqbal,Naseem,Basit,OmarandWahidwereinthesameclassat Hailey'sColegeofCommerceLahore'sBCombatchthatgraduatedin1984.Theyal passedwithflyingcolorsandwentbacktotheirhometowns,exceptBasitwhowas fromLahore.Theyremainedintouchforashortwhilebutgradualylostcontactwith eachother.Andnow,alofsuddenalsevenofthemmetatthismeetingwhich connectedthemwithacommoncause.Whentheywereatcolegetheyusedtobeveryclosefriends.Infacttheywereso closethattheyhadcoinedanamefortheirgroup:RAINBOW.Thishadbeencleverly thoughtofbyWahidwhowasthepoetictypeamongthegroup.RAINBOWcarriedthe initialsofa lthesevenfriendsandalsoreflectedthecauseoftheirassociation.They werefriends,buteachhadhisownpersonality(orcolors).Rasheedhadjoinedan investmentbankaftergraduationandwasnowExecutiveVicePresidentwith responsibilitiesforinvestmentsinequities.Afzalhadjoinedhisfather'sfamilybusinessin Faisalabad,aspinningmil.However,recentlyhisfamilyhadacquiredasignificant interestinachemicalscompany,thoughtheirholdingwasnotsufficienttogetaperson electedonthatcompany'sboard.Iqbalwasnowworkingwithabrokeragefirmbased inKarachithatspecializedinissuinganalysisreportsonthefinancialperformanceand positionofquotedcompanies.Healsodidsomeinvestmentinsharesonhisown account.Naseemworkedinanewspaperandwasitsbusinesseditor.Hetoohad considerableinterestinfinancialreportsoflistedcompaniesandpersonalyheldsome sharesincertaincompanies.BasitwasnowadirectorwithChaudharyChemicalsLtd, oneofthemajorchemicalcompaniesinthecountryspecializinginproductionof variousindustrialandhouseholdusechemicals.Hisfamilyowned52%ofthesharesof CCL,hisfatherwasthechairmanwhileBasitservedasDirectorFinanceandchairman ofitsAuditCommittee.Omarwasworkingforaninsurancecompanythatowned7.2% oftheissuedsharesofCCL.AsGeneralManagerFinanceoftheinsurancecompany, hewaslookingafteritsinvestments,particularlyinlistedcompanies.Wahid,thepoet amongthegroup,hadnorealinterestinthingslikeinvestmentsorshares.However,he hadcometothismeetingasaproxyofhiscousinwhoheld1.8%oftheissuedsharesof CCL.Itwasnocoincidencethatthiscousinwashisemployerwhowasrunningafairly popularbusinessmagazinefromIslamabad.Thefriendsmetafterfifteenyears,attheannualgeneralmeetingoftheshareholdersof ChaudharyChemicalsLtdheldinLahoreon22March2010toconsidertheannual financialstatementsfortheyearended31December2009.Forsomereason,the chairmanofthecompany,Basit'sfather,washeldupelsewhere.ThisdelayedtheAGM andalsoprovidedanopportunitytooldfriendstohavearealyfriendlychitchat.Basit toldthefriendsthathisfatherwasrunningCCLinanautocraticandoldfashionedway, whichinhisopinion,washamperingthegrowthofthecompany.Inhiswords,"my fatherissacrificinglongtermbenefitsforthesakeofpettyimmediatebenefits".Basit wantedatrulycorporatecultureatthecompanywhichhefeltcouldcomeonlyif therewereprofessional,trulyindependentnon-executivedirectorsontheboard.This wassomethinghisfatherwouldneverlethappen.Thefriendsjustsmiled.Theyrealizedthatbetweenthesixofthem(i.e.excludingBasit) theyhadenoughvotestoputanomineeontheboardofthecompany.Atthesame time,RasheedandOmarpromisedthattheywilgettheirrespectiveemployers(the investmentbankandinsurancecompany)toexertpressureonCCLboardtoimprove itsgovernance.AfzalofferedtogradualyincreasehisshareholdinginCCLandtotryto becomeavocalshareholderandmaybearegulardirectoronitsboard.Iqbal, NaseemandWahidundertooktousetheirpensforbringingaboutapositivechangein theconductofCCL'sboard.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

Conch Republic Electronics is a mid sized electronics manufacturer located in Key West, Florida. The company president is Shelley Couts, who inherited the company. When it was founded over 70 years...

Question: Can these seven shareholders bring a significant change in the governance of CCL? How? Shareholders case study Itwasalmostlikeacolegereunion,thoughatotalyunexpected,unplannedand...

Question : which of the friend will, in your opinion, be most effective? why? Shareholders case study Itwasalmostlikeacolegereunion,thoughatotalyunexpected,unplannedand...

Chapter 3: THE SHAREHOLDERS MINI CASE STUDY CHAUDHARY CHEMICALS LTD A rainbow of shareholders Nent Class # was almost like a college reunion, though a totally unexpected, unplanned and unforeseen...

1.Can these friends bring a significant change in the governance of CCL? How? 2.Would you call Rainbow a shareholders' activist group? Why? 3. Which of the friends will, in your opinion, be most...

Corporate Ethics: A Case Study Johnson & Johnson and the Human Life International Shareholder Proposal Case Study from Lawrence & Weber Business and Society (1 pp. 492 - 500) Abstract In 2005 Johnson...

Six news articles are attached below. Select TWO articles only. ASSIGNMENT STRUCTURE: The assignment must follow this structure: 1. Cover sheet 2. For each article: a) Article [Type number and...

Hy-Vee is planning to build a distribution center in a town of 400 people. In order for the development to proceed, the city council must hold a vote to approve rezoning the land for the proposed...

The leaders of some of America's biggest companies are chipping away at the long-held notion that corporate decision-making should revolve around what is best for shareholders. The Business...

Briefly discuss the cost-volume-profit analysis model and how it is used. Use the attached PDF. APA Citation. 300 words. REVISED PAGES 3 Chapter Three 1 Fundamentals of Cost-Volume-Prot Analysis...

Why is it usually desirable to use both a median run test and an up/ down run test on the same data?

Global optimization is made more difficult by the need to design and operate supply chains in uncertain environments, thus increasing the organisation's exposure to risk. Analyse, using your own...

Find the vertex of the following parabolas by completing the square. y = x squared + 1 2 x + 9

Nova Companys total overhead costs at various levels of activity are presented below: Assume that the total overhead cost above consists of utilities, supervisory salaries, and maintenance. The...

Page Enterprises has bonds on the market making annual payments, with nine years to maturity, and selling for $948. At this price, the bonds yield 5.9 percent. What must the coupon rate be on the...

On July 1, 2019, Pat Glenn established Half Moon Realty. Pat completed the following transactions during the month of July: a. Opened a business bank account with a deposit of $25,000 from personal...

Pascale Corp. has the following securities (all purchased in 2014) in its investment ponfolio on December 31, 2014: (1) 2,500 Anderson Corp. common shares, which cost $48,750 (2) 10,000 Munter Ltd....

Laredo Leather Company manufactures high-quality leather goods. The companys profits have declined during the past nine months. In an attempt to isolate the causes of poor profit performance,...

Determine if the overhead allocated to the product relates to a single plantwide overhead rate method, multiple production department factory overhead rate method, or activity-based costing...

Weighted Average Cost of Capital In a world of corporate taxes only, show that the RWACC can be written as RWACC R0 [1 tC(BV )]. LO.1

Stock Value and Leverage Green Manufacturing, Inc., plans to announce that it will issue $2 million of perpetual debt and use the proceeds to repurchase common stock. The bonds will sell at par with...

MM with Taxes Williamson, Inc., has a debtequity ratio of 2.5. The firms weighted average cost of capital is 15 percent, and its pretax cost of debt is 10 percent. Williamson is subject to a...