Every day related companies break rules regarding arms length transactions, but when one of the company's are public that is when it becomes a real problem. Why do you think that there are there laws in place in gov't when it comes to bidding on gov't contracts, because the gov't started handing favorable contracts out to contractors that had relations with people in gov't. When a ceo is in both companies big time you have a similar situation that can occur and what can appear to be the same letting of related party contracts occurring. There seems to be no policing of the contracts and thus the small percentage of shareholders have the possibility of getting treated unfairly. If the shareholders were in both companies in equal proportion there would be no problem. If it is ruled by the investigators that the dealings were not arm's length the ceo could rectify it immediately and satisfy the investigators and problem would be resolved and the pps would rise because new shareholders wouldn't be afraid to invest knowing their interests would be protected by following the law.
I have personally robbed Peter to pay Paul, I do it every day with my companies, I have the same partners in each corp, so know one cares because everyone has the same interest in each company. The minute there is a different partner I would get a complaint and it has happened and I quickly correct it when the complaint is brought to my attention, I have control over the movies so no problem. I had no criminal intent, it was an oversight brought on by the way I am forced to run my business, it is small and I am in total control and it is all about survival. I look at this as a simple business choice/ mistake easily rectified and it could have been planned to be rectified if a large investor/didn't press it when he did, he just demanded it earlier then they had planned to change it.
The ceo is smart and wouldn't risk breaking a law for something that she can easily take care of and that she is in total control over. The ceo still has the money it just needs to be put in another account. Gov't agencies do it all the time, they take money earmarked for section 8 housing and use it for another purpose with the intact on putting it back in the near future, it sure beats going bk. Since LP is in control of both companies she can do write the checks out to the different check books when she is ready. I look at it as the way small business have to do business to survive, it is called imaginative financing. But in this case because it came up it just needs to be addressed, to me this is a no brainer sea easily rectified.
i believe like in any investigation results will show certain accounting principals being lax or not being followed correctly and mistakes will be pointed out and corrected, sweet and simple and everyone will feel better instantly. It is just a matter of having stricter controls in place and acting like a public company vs a private company, happens all the time.
This is all my opinion on a nonissue re a scenario that I am making up to show as an example, it does not reflect reality in any way.
AI
