I reckon there is hint of complicity going on between the Institute of Director’s and some the brokerage companies etc
A prominent Investor Service company wrote a glowing report about a recent company on-market buyback scheme.
I thought I’II test them out on why the following Capital Return has fallen out of favour, as I see it as the most equitable way to distribute excess funds.
This form of return ensure that every shareholders shares a portion of the excess monies that isn’t paid out as dividends. I also mentioned that with the current cost of living crisis that such an extra payment would be beneficial to many people.
Basically it is possible to get 2 dividends and an extra CR payment within a financial.
The investment service respondent, replied with the usual waffle about passive shareholders gaining benefits of on-market buyback future benefits. I responded it only is targeting the benefit for Institutions and larger shareholders to minimise their tax obligation and were they aware of this other form of capital return - no response at all!
I believe that is what they meant by the mantra, “the most efficient way to return capital” , someone can correct me if my tax assessment is incorrect.
If my logic is correct the number of company that had buybacks this financial year, I would question their claims that they are good corporate citizens!
