The conflict of interest that arises when a shareholder who has a controlling interest in multiple firms moves profits away from companies in which he has relatively less cash flow rights toward firms in which he has relatively more cash flow rights is called:

Question

Quizplus · Accepted Answer

Tunnelling refers to the practice of extracting profits from companies in which an individual has a controlling interest and directing them towards companies in which they hold a higher proportion of cash flow rights. This is typically done to benefit the individual rather than the firm, and can lead to conflicts of interest and reduced shareholder value. Expropriation, earnings management, profit mining, and cash extraction are all related concepts but do not specifically describe this situation of moving profits between multiple firms.

The Conflict of Interest That Arises When a Shareholder Who