In an earlier blog entry I was questioning why it was that the CSE was unable to get more companies to list. Apart from the obvious of realizing a sizable tax free gain they can bank or use for other purposes, they seem bent on holding onto their companies so they could do as they please. They are frightened of letting go, and with this mindset, these become one generation companies as the children usually never have the same aptitude or the inclination of the founder and forfeit the inheritance in a short space of time.
I have noticed that the vehicles are in the company name and the running costs are charged to them, including security, drivers, and domestics. Phone and electricity bills are also put to the company as well as the entertainment expenses. Going public means this practice is not permitted. They see this as a perk they cannot countenance paying themselves as they have got used to this benefit.
Money is made by some big organizations out of kickbacks and large bribes are also paid to get some of the government contracts. How does one show these if one were a listed company? I am sure some of the listed companies also engage in this and find an appropriately named diversionary slot to book that into.
Then there are sensitive business relationships that are built over the ages, which the owner feels cannot be divulged and shared, using that as another reason for not wanting to list. This too is short sighted as nothing in life is permanent, but the company takes a life of its own while the individual has no surety of life span. It is important therefore to be more open about the reality and transform the relationships into more flexible ones. The lack of delegation and trust of those that one is delegating to is part of the problem here.
Transnationals and MNC’s have grown as a result of clear procedures and policies for the hierarchy to follow. Individuals should realize that raising capital and bringing in professional managers is an important aspect of growth and longevity of corporations, as otherwise there are limits to growth and prosperity often being overtaken by events outside one’s control. Competition can be tackled head-on.
In summary the Capital Market structures should enable a gradual transition to full listings for such people showing the real benefits in the long run of such a move, which far outweighs the costs that are more perceived that real. The ability to convince the naysayer is at the heart of the real deal. So go for it take no prisoners!