In order to examine the poor performance or negligence of corporate governance and lack of
corporate legislations for the companies I have used case study approach and have chosen
Maxwell Corporation and corporate scan
...
In order to examine the poor performance or negligence of corporate governance and lack of
corporate legislations for the companies I have used case study approach and have chosen
Maxwell Corporation and corporate scandals. It is really important to discuss real life situations
in relates to the Corporate Governance. The approach of this case study is discussing number of
corporate governance issues in this case study it was Maxwell Corporation. Also this report first
part analyze the Maxwell communication corporations scandals for the last decade and reasons
to those scandals and what are the corporate governance solution in order to overcome fraud. In
the later of the report some discussion were point out such as literature about importance of the
corporate governance and history of the corporate governance final part produce some
recommendations to overcome fraud and reinstate investors confidence on their investments.
Also it discussed some theories relates to corporate governance and its issues including
limitations.
Robert Maxwell Corporation
Ajith Wallawita4
Robert Maxwell is communication proprietor who was well known in the communication
industry since 1960. In 1969 Maxwell have merge his Pergamon Company with Saul Steinburg
(Head of Leasco). So when Leasco purchase Pergamon press where Maxwell acts as a
subordinate role in the merge company. Leasco was profitable business with claiming $27m
profit and more than $1 bn total assets in the year of 1968. So Maxwell wanted to account of his
company substantial profit at that time so that support share price and assist Maxwell negotiation
with Leasco. That time Sunday time queried about the procedures used by Audit Company about
Pergamon’s accounts. It was alleged that stocks had been overvalued. Also Leasco financial
advisers have questioned about pergamon’s accounts information as it difficult to extract and
they questioned from Maxwell about Pergamon’s profitability.bbb
According to the independent audit carried out by Martin Harris in 1968 have disclosed that
Pergamon’s profit was $140,000 instead of $2.1m. After this report Pergamon’s auditors resigned
and board of trade or DTI investigated Maxwell in 1969. Report mentioned that Maxwell is not
suitable or reliable person to exercise proper methods for public quoted company.
Price water house have carried out some investigation and it indicate the important of unify
accounting standards. This report was regarded as valuable addition to the accounting profession.
After this report accounting standard committee had been setup in order to unify the accounting
standards in financial reporting treatments and audits. But governments were invited by
accounting professional to include some minimum standard to the financial reporting and
auditing.
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