The factors that cause companies to be suspended from the Kuala Lumpur stock exchange / Mohd Hassan Che Haat … [et al.]

Che Haat, Mohd Hassan and Abd Rahman, Rashidah and Abd Hamid, Nadiah and Mahenthiran, Sakthi (2006) The factors that cause companies to be suspended from the Kuala Lumpur stock exchange / Mohd Hassan Che Haat … [et al.]. Malaysian Accounting Review, 5 (1). pp. 115-138. ISSN 1675-4077

Official URL: https://mar.uitm.edu.my/

Abstract

This is an empirical study of troubled (i.e., PN 4) companies, and their agency costs to outsiders who invest in them. The sample consisted of 21 companies each in three groups made up ofPN4, positive economic profit and negative
economic profit companies. The study finds that outside investors in PN 4 companies incurred extreme agency costs compared to positive economic profit companies because of poor governance. Relative to the control group, PN 4 companies had higher insider ownership, borrowing, and lower equity values. The study highlights the uniqueness of the Malaysian securities law that allows corporate insiders to proactively use monitoring mechanisms to lower agency costs.

Metadata

Item Type: Article
Creators:
Creators
Email / ID Num.
Che Haat, Mohd Hassan
UNSPECIFIED
Abd Rahman, Rashidah
UNSPECIFIED
Abd Hamid, Nadiah
UNSPECIFIED
Mahenthiran, Sakthi
UNSPECIFIED
Subjects: H Social Sciences > HD Industries. Land use. Labor > Corporations > Corporate organization. Corporate governance > Malaysia
H Social Sciences > HG Finance > Investment, capital formation, speculation > Stock exchanges. Insider trading in securities > Malaysia
Divisions: Universiti Teknologi MARA, Shah Alam > Accounting Research Institute (ARI)
Journal or Publication Title: Malaysian Accounting Review
UiTM Journal Collections: UiTM Journal > Management & Accounting Review (MAR)
ISSN: 1675-4077
Volume: 5
Number: 1
Page Range: pp. 115-138
Keywords: Troubled companies; corporate governance; Disclosures; Insider ownership
Date: 2006
URI: https://ir.uitm.edu.my/id/eprint/13793
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13793

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