Ethical Paper - 1 Connie Hernandez Professor Kerbel FIN4303...

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Connie Hernandez Professor Kerbel FIN4303 1743988 (305) 299-8282 Chern070@fiu.edu April 16, 2011
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3 Polly Peck International was founded in 1940 by Raymond Zelker and his wife Sybil. In 1974, after the Turkish invasion of Cyprus, the northern Cyprus government invited Asil Nadir to launch a processing and packaging business. Retro Investments, a company controlled by Asil Nadir bought 58% of the company. Soon after on July 7, 1980 Asil Nadir, a Turkish Cypriot, took over as Chief Executive. Polly Peck became a barely profitable United Kingdom textile company made up of 17,220 employees, which expanded rapidly in the 1980s. Polly peck International, PLC is a holding company for expanding and increasingly diverse groups of subsidiary companies. Polly Peck was a leading star of the FTSE 100 before it collapsed after being fraudulently of cash. Polly Peck than launched a rights issue, which is an option a company uses to raise capital under a seasoned equity offering of shares to raise money, to raise £1.5 million of new capital for investments abroad. Nadir began the early undertakings in 1982, including Voyager Kibris Ltd, Uni-Pac Industries Ltd. and Sunzest Trading Ltd. These three companies are incorporated in the Turkish Republic of Northern Cyprus. Voyager Kibris bought the Sheraton Voyager Hotel located in Turkey and built resort hotels in Northern Cyprus. Uni-Pac, a corrugated box manufacturer and packaging company, was forecasted to produce £2.1 million in profits at minimum. In 1983 to 1987 Polly Peck International’s textile business expanded into purchasing a 76 percent stake in Santana Inc., diversifying into the electronics business by obtaining 82 percent ownership of Vestel Electronics and acquiring a majority interest in Palmon Ltd., a casual shirt manufacturer. The company embarked on a major acquisition program, with large amounts of financing provided by banks on a revolving line-of-credit basis. In many instances, the debt was secured by the company's publicly traded shares. Polly Peck became the only European company to be listed in the Tokyo Stock Exchange when Mr. Nadir bought a 51 percent stake in Sansui, a Japanese electronics company. Polly Peck International’s market capitalization went from £300,000 to £1.7 billion at its peak and became a holding company for a worldwide group of over 200 direct and indirect subsidiary companies in less than ten years. Polly Peck became Britain’s top one hundred quoted companies, with net assets of £845 million
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4 and £161.4 million in pre-tax profits. By 1989 the company was worth £1.6b and Nadir was worth £200m and was listed as the 36 th richest person in Britain. As the Chief Executive of Polly Peck, Mr. Nadir also controlled IBK, a Turkish bank with a Head
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This note was uploaded on 04/29/2011 for the course FIN 4303 taught by Professor Smith during the Spring '11 term at Miami Dade College, Miami.

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Ethical Paper - 1 Connie Hernandez Professor Kerbel FIN4303...

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