The learning outcomes of this paper are as follows: to understand the language of accounting, to interpret financial statements to understand beyond what’s reported and to predict…
Abstract
Learning outcomes
The learning outcomes of this paper are as follows: to understand the language of accounting, to interpret financial statements to understand beyond what’s reported and to predict the financial health of a company before it is too late.
Case overview/synopsis
The case revolves around the Indian coffee retail giant - Café Coffee Day (hereafter, CCD). Coffee Day Global Limited of which CCD is a part, is the largest producer of Arabica beans in India. The case goes on to discuss the life and profile of VG Siddhartha (hereafter, VGS), whose leadership and farsightedness made coffee a household name in India, traditionally a tea-drinking country. Within just a year or two after its Initial Public Offering in November 2015, the company’s financial and legal troubles began to surface. The worst blow came when VGS, the 60-year-old founder and CEO committed suicide on July 29, 2019. His group’s mounting debt and impending doom had propelled him to take his own life. Today, the future of CCD remains hanging in the balance, with creditors ready and willing to take the firm into bankruptcy.
Complexity academic level
Under-graduates and above.
Supplementary materials
Teaching notes are available for educators only.
Subject code
CSS 1: Accounting and Finance.
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Bakr Al-Gamrh, Redhwan Al-Dhamari, Akanksha Jalan and Asghar Afshar Jahanshahi
This study examines the impact of two different types of foreign ownership—by Arab and non-Arab investors on firms' financial and social performance. It then goes on to…
Abstract
Purpose
This study examines the impact of two different types of foreign ownership—by Arab and non-Arab investors on firms' financial and social performance. It then goes on to investigate how the degree of board independence affects the aforementioned relationship between these two types of foreign investors on firm performance.
Design/methodology/approach
The sample for the study is a panel of all listed firms in the Dubai Financial Market (DFM) and the Abu Dhabi Securities exchange (ADX) from 2008 to 2012.
Findings
Results indicate that while Arab foreign ownership affects firms' financial and social performance negatively, non-Arab foreign ownership does so, positively. Further tests indicate that board independence weakens the negative relationship between firm financial and social performance with foreign Arab ownership and deteriorate the relationship between firm financial and social performance and non-Arab foreign ownership.
Research limitations/implications
Future studies may extend the coverage of the study by including other countries in the region and other identities of the foreign investors.
Practical implications
This study may help policy makers in the UAE to improve the implementation and enforcement of existing regulations concerning corporate social responsibility (CSR) and board independence. It also highlights the need to look into the monitoring role of independent board members.
Originality/value
This is the first study to examine the role of board independence on the relationship between foreign ownership and firm's financial and social performance. To the best of our knowledge, this is the first paper that attempts to enrich the understanding of foreign ownership by classifying it into Arab versus non-Arab.
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Akanksha Jalan and R. Vaidyanathan
This paper is an effort to demystify tax havens – what they mean, what they offer and why they are harmful. It offers a detailed analysis of abusive tax planning by multinational…
Abstract
Purpose
This paper is an effort to demystify tax havens – what they mean, what they offer and why they are harmful. It offers a detailed analysis of abusive tax planning by multinational corporations, involving the use of tax havens, shedding light on how corporations use “egregious” tax-sheltering techniques right from their incorporation to avoid payment of income taxes. The paper also discusses global efforts against the phenomenon and policy recommendations.
Design/methodology/approach
The paper brings together definitions from various sources to accurately define and identify tax haven economies. The key contribution of the paper is to diagrammatically explain the use of tax havens by MNCs right from the time they are incorporated. It explains how every big and small corporate decision is motivated by the desire to save taxes and how tax havens come in handy for such corporations.
Findings
This paper finds that base erosion and profit shifting (BEPS) is a pervasive phenomenon, largely due to the suppliers of tax haven operations. Here, corporate decisions are divided into strategic and operational and further subdivided into investing, operating and financing activities, and provide real-life corporate examples of how tax havens fit into almost every corporate decision. This is the key contribution of the paper.
Research limitations/implications
This is a review paper that sums up knowledge about tax havens and their use by MNCs. It does not, however, use empirical data to corroborate its findings. It would be interesting to see empirically whether MNCs with greater tax haven operations actually have lower effective tax rates.
Practical implications
The paper can provide a framework for designing tax policies in a manner that geographical arbitrage can be minimized. It can enable formulation of the necessary incentive structures in the form of penalties, rewards and the like for both the users and providers of tax haven services to curb massive base and profit shifting out of high-tax countries.
Social implications
The paper is one small step in the direction of bringing about equality in tax payments, i.e. to align real tax systems with the canon of equality that Adam Smith once dreamt of. Taxes should be progressive in nature, implying that the amount of taxes paid should increase with one’s income. However, with the advent of offshore financial centres and egregious tax planning techniques, only the smaller corporations and middle-class individuals end up paying taxes, while the rich and bigger corporations get away easily.
Originality/value
The paper explores in detail the manner in which MNCs use, rather exploit, regulatory loopholes in tax systems of different countries to save on tax payments. By shifting their tax base from one country to another, MNCs not only hamper Treasury collections but also breed disrespect for the global tax system. The paper can help in designing tax laws in tune with such corporate motives.
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Akanksha Choudhary and Ashish Singh
A few studies in India have related daughters’ education to their fathers, but there is little to no evidence when it comes to the intergenerational relation between daughters and…
Abstract
Purpose
A few studies in India have related daughters’ education to their fathers, but there is little to no evidence when it comes to the intergenerational relation between daughters and mothers’ education. Using India Human Development Survey (IHDS) 2011–2012, the purpose of this paper is to investigate intergenerational educational mobility among women (15–49 years) (vis-à-vis their mothers) for all India.
Design/methodology/approach
The study uses transition/mobility matrices and multiple mobility measures for the examination of intergenerational educational mobility among women (15–49 years) in India. The data have been taken from the “India Human Development Survey 2011-12.”
Findings
Findings indicate that intergenerational educational mobility at the all-India level is about 0.69, that is, 69 percent of the women acquire a level of education different from their mothers. Of the overall mobility, about 80 percent is contributed by upward mobility whereas the rest is downward. Mobility is greater in urban areas and is highest among the socially advantaged “Others” (or upper) caste group. Also, the upward component is substantially lower for socially disadvantaged groups compared to others. Further, there are large inter-regional variations, with the situation being worst in the central and eastern states such as Uttaranchal, Chhattisgarh, Bihar, Jharkhand, Assam, Arunachal Pradesh, Meghalaya, Manipur, Mizoram, Tripura, etc. Moreover, mobility (overall and upward) increases consistently as one moves up the income distribution.
Originality/value
This study is perhaps the first study which comprehensively studies intergenerational educational mobility for women (15–49 years) at an all-India level. Findings not only capture the mobility at the aggregate level but also for different caste groups as well as regional variations and income effect.