Friday, June 24, 2005
If the corporation is not listed then it's the duty of the banks who lend the money to restrict how the fund is used. If the corporation is listed then a good set of listing rules with full disclosure transparency and good enforcement is required to ensure that fund raised is properly used. Recognition of credit rating is also required such that investors and finance institutions are fully informed of the default risks they are exposed to. In short corporate governance is essential.