Tunnelling

Simon Johnson, Rafael La Porta, Florencio Lopez-de-Silanes (florencio.lopezdesilanes@skema.edu) and Andrei Shleifer

No 7523, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Tunnelling is defined as the transfer of assets and profits out of firms for the benefit of their controlling shareholders. We describe the various forms that tunnelling can take, and examine under what circumstances it is legal. We discuss two important legal principles -- the duty of care and the duty of loyalty -- which courts use to analyze cases involving tunnelling. Several important legal cases from France, Belgium, and Italy illustrate how and why the law accommodates tunnelling in civil law countries, and why certain kinds of tunnelling are less likely to pass legal scrutiny in common law countries.

JEL-codes: G3 G38 (search for similar items in EconPapers)
Date: 2000-02
New Economics Papers: this item is included in nep-cdm
Note: CF
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (15)

Published as American Economic Review, Vol. 90, no. 2 (May 2000): 22-27

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Related works:
Journal Article: Tunneling (2000)
Working Paper: Tunneling (2000)
Working Paper: Tunnelling (1999)
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