Unveiling Risks: ISB experts analyse share pledging concerns

Sep 21, 2023

Nupur Pavan Bang, Sougata Ray and Kavil Ramachandran of ISB’s Thomas Schmidheiny Centre for Family Enterprise highlight the concerns about share pledging in an article for Prime Database. They write: “When we study individual cases of pledging of shares, we find that in conjunction with bad business decisions, pledging has had dire consequences for the promoters and other stakeholders. Such companies are many. They include Satyam, Future Group, and Zee Entertainment. However, there are also companies that have created long-term wealth for all shareholders by using pledging as a strategic tool to raise funds for expansion and growth. Examples include Apollo Hospitals and Granules Pharmaceuticals.”