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Definition of 'Tunneling'
An illegal business practice in which a majority shareholder or high-level company insider directs company assets or future business to themselves for personal gain. Actions such as excessive executive compensation, dilutive share measures, asset sales and personal loan guarantees can all be considered tunneling. The common thread is the loss to the minority shareholders, whose ownership is lessened or otherwise devalued through inappropriate actions that harm the overall value of the business.
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Investopedia explains 'Tunneling'
This risk is especially prevalent for investors in emerging markets, where government and regulatory controls may not be sufficient to stop the practice from occurring, often under legal guises. The practice is not reserved to moderately advanced economies; many instances can be found in advanced economies, especially those under systems of "civil law". The U.S. legal system is rooted in "common law", which provides broad enforceable laws with simple maxims like "fairness" and "for the common good". Under civil law, the letter of the law is the most respected measure, so would-be tunnelers can pass an act of tunneling off under certain technicalities, which often hold up in court.
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Search results for 'Tunneling'
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http://www.investopedia.com/articles/stocks/08/costs-bad-ceo.asp
Excess compensation, golden parachutes, tunneling and IPO
spinning make these bad executives even worse. ...
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http://financialedge.investopedia.com/financial-edge/0212/4-Of-The-Largest-Bank-Heists-In-History.aspx
... bank heist. No longer is money stolen by jumping on a train, blasting a hole
in the side of a bank or tunneling under a vault. Today ...
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http://financialedge.investopedia.com/financial-edge/0710/What-The-Financial-Regulation-Overhaul-Means-For-You.aspx
... The fact is that most SEC cases, from insider trading to tunneling, are legal matters
in the end and could be handled by the legal system - or a division ...
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http://financialedge.investopedia.com/financial-edge/0310/This-Week-in-Financial-History-Bre-X-Silver-Thursday-And-Adelphia.aspx
... (Learn more about personal medical spending in Steering Clear Of Medical Debt.)
Tunneling Out Adelphia On March 24, 2002, Adelphia Communications announced ...
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http://stocks.investopedia.com/stock-analysis/2007/Go_Nuclear_With_A_New_ETF_NLR.aspx
... IHI Corp is the No. 2 holding and gives investors exposure to tunneling
machines used in uranium mining along with other equipment. ...
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http://www.investopedia.com/articles/stocks/09/nastiest-shareholder-activist-battles.asp
... (Excess compensation, golden parachutes, tunneling and IPO spinning make bad executives
even worse; read more in Pages From The Bad CEO Playbook.) Kirk ...
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