The Challenges at JSW Steel: Brand Valuation and Corporate Governance Issues

Pitabas Mohanty and Tina Stephen
Additional contact information
Pitabas Mohanty: XLRI — Xavier School of Management, Jamshedpur, India
Tina Stephen: XLRI — Xavier School of Management, Jamshedpur, India

Asian Case Research Journal (ACRJ), 2017, vol. 21, issue 01, 231-251

Abstract: The shareholders of JSW Steel received a list of 24 items that would be put to vote in the AGM of the company, to be held on 31 July, 2014 along with the annual report of the company for the 2013–14 fiscal year. Item No. 23 of this list was a surprising addition, as the company stated that the brand name ‘JSW’ belongs to a private company called JSW Investments Private Limited (JSWIPL), promoted by Ms. Sangeeta Jindal, the wife of Mr. Sajjan Jindal, the Managing Director of JSW Jindal. It further stated that henceforth JSW Steel would pay 0.25% of the net consolidated turnover to JSWIPL for the use and promotion of the brand. The stock price fell in reaction to this news.JSW Steel justified its move by arguing that payment of royalties for the use of brand name is a common practice followed by Indian business groups. Many corporate governance experts, however, called this an abusive transaction and advised the shareholders to vote against the proposal. This case allows the examination of issues such as related party transactions and their corporate governance implications and the relevance of brand valuation for a steel company.

Date: 2017
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.worldscientific.com/doi/abs/10.1142/S0218927517500080
Access to full text is restricted to subscribers

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wsi:acrjxx:v:21:y:2017:i:01:n:s0218927517500080

Ordering information: This journal article can be ordered from

DOI: 10.1142/S0218927517500080

Access Statistics for this article

Asian Case Research Journal (ACRJ) is currently edited by Lau Geok Theng

More articles in Asian Case Research Journal (ACRJ) from World Scientific Publishing Co. Pte. Ltd.
Bibliographic data for series maintained by Tai Tone Lim ().