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MID EXAM
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CORPORATE GOVERNANCE

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MBPE-S19-001

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MUNEEB ALI MBA-4 MBPE-S19-001

CASE STUDY (CHAUDHRY CHEMICALS)

QNO:1 What role is each of the rainbow friend playing?
Basit father have 52% shares and also the chairman of the company but basit does not
like with his way of working because the current system does not support the present
market for long term support and he want to change the company vision and status by the
help of his friends and the role which his friend are playing are following:

 Rasheed and Omar:

a) As they both worked in investment and in insurance company
b) so they both promise that they will get their respective employer to exert
the pressure on the CCL board to improve its governance.
 Afzal:
He offered that he gradually increase his share holding in results he would be the
regular director on his boards
 Iqbal & Naseem, wahid:
They actually undertook to use their pens for bringing about the positive change
in the conduct of the company
QNO:2 can these friend can bring the significant change in the

governance of the CCL? How ?

yes, these friend can bring the significant change in the governance of the CCL due to the
following reasons:
 If Afzal become the director of the company by increasing his shares
 If Rasheed and Omar exert the pressure on CCL board from their employer to
improve their governance
 If Iqbal ,Naseem, wahid use their pens to bring the significant change in the
company conduct.
MUNEEB ALI MBA-4 MBPE-S19-001

QNO:3 would you call rainbow a shareholder activist group? Why?

yes, we can call the rainbow a shareholder activist group due to the following reasons:
 This group is helping including the basit for the improvement of the company
profile and status
 This group also owns the large parts of shares.
 This group the can play the significant role on the governance of the CCL
QNO:4 which of the friend will in your opinion more effective ? why?

Afzal will be the more effective due to the following reasons :

 Afzal is well experienced and also have his own business

 He can easily control dynamic market situation by their experience
 He can be a non-executive independent director
 All the other members of the rainbow can easily elect him the director of the
company by their company
MUNEEB ALI MBA-4 MBPE-S19-001

Case study (polly peck ltd.)

QNO:1 Discuss the advantages and disadvantages of letting just one
person to make all the important decision in the company ?
The advantages of the letting just one person to make all the important decision in the
company are the followings:

 Efficiency : works with more efficiency

 Focus on mission : he focus on his company mission
 Focus on vision : he also focus on his company vision
 Speed : the speed of work is enhance because the decision making duration is
reduced
 Significant authority in company: he considered as the all in one in the
company
 Responsible for his decisions : he is also responsible for his decisions
 Follow best practices to achieve his goal : he present the best ways and
methods to achieve his goal.
The disadvantages of the letting just one person to make all the important decision in the
company are the following:
 Misuse of his authority : the misuse of the authority can be done
 Challenging to improve productivity: it is very challenging to improve the
productivity or growth by the one single person
 More risky : it is very risky
 Risk to take wrong decisions: the one person can take the wrong decisions
 Responsible for all wrong decision: the one person would be all responsible for
any loss of the company
QNO:2 Where do you think the principles blame lies : with the book
who extended loan to ppi without due caution of with ppI who borrowed
well beyond their capacity? And why?
The principle blame lies with the board members and banks who never questioned the
decision of Asil nadir :

 Where is money is used

 What is the profit
 Why the companies give more & more money into the polly peck account
 MUNEEB ALI MBA-4 MBPE-S19-001

Just because the Asil Nadir is the influential personality they got blind when he invest more
to maximize the company wealth.
QNO:3 what lesson can be learned from this case study?
the lesson which is learned from this case study are the following:
 The one person who are doing decision must aware to the lives of thousands people
who are associated with the company
 All decision should be taken after the approval of the board member by this one
person can not be blamed for all .
 Audit firm should strong to see that the company is ruled according to the business
rules .
QNO:4 which stake holder suffered most as a result of PPI scandal?
how?
Almost 25000 employees of the polly peck ltd. Suffered from his bankruptcy and many
suppliers which are associated with the polly peck ltd. Are also suffered .so the both are
suffered .