via Columbia U - Governance Problems In Colsely Held Corporations

The following paper is a discussion on governance problems in closely held corporations. What has occurred in GBN.H is an illiquid stock that does not trade on the stock market and has been illiquid for years.

Not only that but massive expropriations of gold doré by the principal shareholders has occurred. Doré is being offered at massive discounts to market value, in order to pay for everything. But the unrefined gold being made off with, absconded, five-finger discounted, embezzled, secretly stockpiled, going unrecorded, or whatever metaphor you choose to call it, will soon no longer provide capital gains to anyone from the simple fact that price rises will slow and gold volatility will remain very low.

The value is in the mining company, which can provide all the capital gains and a dividend yield.

But the principal shareholders have also missed the mark entirely, and could not foresee that the decline of the $CAD would provide a windfall for gold mining operations in Canada. They are now years behind the curve, while the gold mining market has revived, the stock is off exchange with a trading halt.

There are also serious issues of ownership in the company. During the no bid period, shareholders were literally physically squeezed out of their position, while insiders consolidated control.

But the main problem is the market for corporate governance. That GBN.H is a closely held corporation shows up like severe acne on an adolescent.

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-F6