Triumph of the will

An excess exposes the mechanisms that are normally hidden. It shines so brightly that it is hard to look away.

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This story has already spread through all the media, from stock market portals to tabloids. ZPUE S.A., a company supplying equipment for the electric power industry, has leased a luxury yacht worth PLN 37 million (details and photos). The first current report was brief and limited to basic details about the agreement. However, it did not go unnoticed, as just three days later the company published a supplementary report, in which it tried to explain why such an expense was necessary. The second report will certainly go down in history. It is worth reading it carefully in its entirety, because the justification for this transaction is at least original. To be clear, I do not envy whoever was charged with the task of writing that report. They did what they could. Judge for yourself.

This story says a lot, not so much about stock market reporting, but about the essence of the company, and the capital market in general. ZPUE is controlled by a controlling shareholder. By complete coincidence, he has talked about his passion for sailing in press interviews. The company has been listed on the stock exchange for years, has major financial institutions as shareholders, has independent members on the Supervisory Board, and probably has all the procedures, committees and arrangements in place. There are lots of different regulations and laws protecting company assets and the interests of minority shareholders. In spite of this, it decides to conduct a transaction that is, to put it mildly, controversial and suspected of being most beneficial to the controlling shareholder. To quote the classic, the political will of the controlling shareholder is everything. The rest is nothing.

No legal regulation can eliminate such actions. Only widespread disapproval and the resulting pressure can curb them.

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