WELCOME TO

OUR
PRESENTATION
FIN-5206 CORPORATE GOVERNANCE &
RESTRUCTURING
ON
POLLY PECK INTERNATIONAL
Presenting to:
Shaikh masrick hasan
assistant professor,
Department of finance,
Jagannath university. Presented By
Salman Rahman
On behalf of the Group,
MBA (6th batch),
Department of Finance,
Jagannath University.
 GROUP LIST

NAME ID
Md. Anisuzzaman Sarker M150203081
Sarowar Alam M150203082
Salman Rahman M150203084
Md. Shaiful Islam M150203088
Khalil-ur-Rahman M1502030101
 INTRODUCTION OF POLLY PECK

Founded in 1940
Public Company
Headquarters in London ,
UK
CEO Asil Nadir
17000 Employees
Textile Industry
Textile products
Bankrupt & broken up in
1990
 ASIL NADIRS EARLY LIFE

Born on 1st May 1941 in Lefka, Cyprus.

Turkish Cypriot former businessman
Studied economics at Istanbul University
Returned to Cyprus before graduation to set up
clothing business.
In 1970s he purchased a small British textile
company.
Which he turned into a portfolio company with which
to make various corporate raiding purchases in fruit
packing , clothing, and consumer electronics.
In 1980s he was tycoon and CEO over 24,000
shareholders.
 LATER CAREER OF ASIL NADIRS

Business in northern Cyprus Kibris media group

Publishes the newspaper-weekly bi Cyprus today
Owns radio and TV station
Published articles Republican Turkish Party.
Nadir was listed at 36th on Sunday Times Rich list in 1990.
At that time he was the wealthiest individual in the Turkish Republic of Northern
Cyprus and holds business assets in the Republic of Turkey and TRNC.
 LATER CAREER OF ASIL NADIRS
Early in 1980 Restro Investments, a company Nadir controlled bought 58% of the
company for 270,000.
Nadir took over asChief Executive on 7 July 1980. On 8 July 1980 Polly Peck
launched arights issue to raise 1.5m of new capital for investments abroad.
In 1982 Nadir began the early ventures. These included Uni-Pac Packaging
Industries Ltd, Voyager Kibris Ltd, and Sunzest Trading Ltd, three companies
incorporated in the Turkish Republic of Northern Cyprus.
Uni-Pac was a corrugated box manufacturer and packaging company formed to take
advantage of surplus citrus fruit being grown in Cyprus, which was forecast to
produce a minimum of 2.1 million profit. Voyager Kibris Ltd was used to purchase
the Sheraton Voyager Hotel in Turkey and to build resort hotels in Northern Cyprus.
In September 1982 Nadir acquired a major stake of 57% in a textile trader, Cornell
Dresses.
 LATER CAREER OF ASIL NADIRS
Cornell rose from 26p to over 100p as soon as Nadir's interest was confirmed. Nadir
had Cornell sell a rights issue, raising 2.76 million.
This capital, plus a further 6 million from Polly Peck, was used to set up the 'Niksar'
mineral water bottling plant in Turkey. Niksar subsequently sold an estimated 100
million bottles of water to theMiddle East.
In 1983, Nadir also began expanding PPI's textile business by purchasing a 76
percent stake in Santana Inc. in the United States, and a majority stake in InterCity
PLC in the UK.
Nadir then extended PPI's textile operations into theFar East, acquiring a majority
stake in Impact Textile Group in 1986, and by increasing PPI's existing stake in
Sansui Ltd. to 90 percent.
In 1987 PPI acquired a majority interest in Palmon (UAE) Ltd., a manufacturer of
casual shirts.
 LATER CAREER OF ASIL NADIRS
In April 1984, PPI also diversified into theelectronics business by acquiring 82
percent ownership ofVestel Electronics, one of the largest publicly traded
companies inTurkey. Vestel manufactured colour televisions,air conditioning units,
audio equipment,microwave ovens andwashing machines.
PPI's success in the electronics business was substantially enhanced in early 1986
whenAkai of Japan decided to join Ferguson, Salora, andGoldStar as licensors to
Vestel. Subsequently, PPI also acquired housewares manufacturerRussell Hobbs.
By 1989 Polly Peck had become an international player by acquiring a 51% majority
stake inSansui.Also in 1989, Polly Peck bought the formerDel Monte canned fruit
division for $875 million fromRJR Nabisco, which had previously acquired it.
Polly Peck then gained the ultimate award of being admitted to theFTSE 100Share
Index in 1989.
 LATER CAREER OF ASIL NADIRS

In less than ten years, under this growth-by-acquisition strategy, PPI's market
capitalization went from only 300,000 to 1.7 billion at its peak.
It became a holding company for a world wide group of over 200 direct and
indirect subsidiary companies.
Trading in the companys shares was suspended on 20 September 1990.
PPIs problems became apparent from the structure of the groups debts.
The company had over 100 million in short-term revolving lines of credit. Even
more debt consisted of long term loans for which Nadir had offered Polly Pecks
shares ascollateral.
In October 1990,Polly Peck ,a large UK quoted company, was placed into
administration. At the beginning of August 1990 the share price was 418p,but by
September 1990it had fallen to 108p.
 LATER CAREER OF ASIL NADIRS

This represented a loss of nearly 75% of their value in under two months.
Trading of the shares was suspended by the London stock exchange and Polly
Peck collapsed with debts estimated at 1.3bn.
In August 2012 the serious fraud office(SFO) prepared a case against Asil Nadir
,CEO accusing him of theft and false accounting of 34m. But he was found guilty
on stealing of 29m from Polly Peck.
He was sentenced to ten years imprisonment.
Actually it was a scandal of corporate governance which also includes liquidity
problems, agency problem due to diversification ,acquisitions and mergers of
different companies and long term debts.
 SCANDAL OF CORPORATE GOVERNANCE
AGAINST ASIL NADIR,CEO OF POLLY PECK
INTERNATIONAL
Corporate governance is the set of processes, customs, policies, laws, and
institutions affecting the way a corporation (or company) is directed, administered
or controlled. Corporate governance also includes the relationships among the
many stakeholders involved and the goals for which the corporation is governed.
Corporate governance is the system by which business corporations are directed
and controlled. The corporate governance structure specifies the distribution of
rights and responsibilities among different participants in the corporation, such as ,
the board, managers, shareholders and other stakeholders, and spells out the rules
and procedures for making decisions on corporate affairs.
THANK YOU