Listed firms with political links widespread: Study<\/p>\n
Deutsche Presse Agentur, Singapore<\/p>\n
Nearly 22 percent of publicly-listed companies in Indonesia
\nhave political links, followed by 20 percent in Malaysia and 8
\npercent in Singapore, a study showed on Tuesday.<\/p>\n
The percentage is 15 percent in Thailand compared to the 2.7
\npercent average for all 47 countries covered in the study by Mara
\nFaccio, an assistant professor at Vanderbilt University's Owen
\nGraduate School of Management.<\/p>\n
The results published in The Business Times define a company
\nas politically connected if one of its large shareholders or top
\ndirectors is a member of parliament, a minister, head of state or
\nclosely related to a top official.<\/p>\n
Companies with political links have higher leverage, access to
\ndebt financing, lower taxation and higher market shares, the
\nstudy found.<\/p>\n
They underperform, however, on an accounting basis when
\ncompared to those with no political ties, it said.<\/p>\n
Political connections are especially common in countries with
\nhigher levels of corruption, barriers to foreign investments and
\nmore transparent systems, according to the findings.<\/p>\n
Listed companies with political ties are "widespread"
\nglobally, Faccio was quoted as saying.<\/p>\n
Some 59.5 percent of connections was with top directors, while
\n40.5 percent of cases involved large shareholders, she said.<\/p>\n
"In 15.5 percent of cases, the connection is with the
\ncountry's leader or minister; in 59.6 percent of cases the
\nconnection with an MP," Faccio noted.<\/p>\n
"In 24.9 percent of the cases, mostly concentrated in Malaysia
\nand Indonesia, the connection consists of a close relationship
\nwith politicians," she told the newspaper.<\/p>\n
Unlike many countries, Faccio said Singapore has "a quite
\ndeveloped set of regulations on incompatibilities of MPs and
\nministers".<\/p>",
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"sponsor": "Okusi Associates",
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