TY  - JOUR
AU  - Johnson,Simon
AU  - Porta,Rafael La
AU  - Lopez-de-Silanes,Florencio
AU  - Shleifer,Andrei
TI  - Tunnelling
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 7523
PY  - 2000
Y2  - February 2000
UR  - http://www.nber.org/papers/w7523
L1  - http://www.nber.org/papers/w7523.pdf
N1  - Author contact info:
Simon Johnson
MIT Sloan School of Management
100 Main Street, E52-562
Cambridge, MA 02142
Tel: 617/290-9618
Fax: 617/253-2660
E-Mail: sjohnson@mit.edu

Rafael La Porta
Dartmouth College
Tuck School
210 Tuck Hall
Hanover, NH  03755
Tel: 603/646-3739
E-Mail: rafael.laporta@dartmouth.edu

Florencio Lopez-de-Silanes
EDHEC Business School
393, Promenade des Anglais BP 3116
06202 Nice Cedex 3
FRANCE
Tel: +33 (0) 4 93 18 78 07
Fax: +33 (0) 4 93 18 78 41
E-Mail: Florencio.lopezdesilanes@edhec.edu

Andrei Shleifer
Department of Economics
Harvard University
Littauer Center M-9
Cambridge, MA 02138
Tel: 617/495-5046
Fax: 617/496-1708
E-Mail: ashleifer@harvard.edu
AB  - Tunnelling is defined as the transfer of assets and profits out of firms for the benefit of their controlling shareholders.  We describe the various forms that tunnelling can take, and examine under what circumstances it is legal.  We discuss two important legal principles -- the duty of care and the duty of loyalty -- which courts use to analyze cases involving tunnelling.  Several important legal cases from France, Belgium, and Italy illustrate how and why the law accommodates tunnelling in civil law countries, and why certain kinds of tunnelling are less likely to pass legal scrutiny in common law countries.
ER  -