Small shareholders diddled

ASX CEO Elmer Funke Kupper knows that setting a good example is vital. With its regulatory function, the behaviour of ASX sends a signal to other listed companies. So the announcement mid-last year that the company would raise $553m of capital in the fairest way possible—via a renounceable entitlement offer—deserves credit. Unfortunately, few companies meet this standard. Many share issues diddle small shareholders at the expense of the big end of town. So how do you recognise if you’re being short-changed? A renounceable entitlement offer—originally called a ‘rights issue’—is the fairest way to raise capital because it’s pro rata; shareholders...

ASX CEO Elmer Funke Kupper knows that setting a good example is vital. With its regulatory function, the behaviour of ASX sends a signal to other listed companies. So the announcement mid-last year that the company would raise $553m of capital in the fairest way possible—via a renounceable entitlement offer—deserves credit.

Unfortunately, few companies meet this standard. Many share issues diddle small shareholders at the expense of the big end of town. So how do you recognise if you’re being short-changed?

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