Quote:
Originally Posted by ChinoCoug
so is it normal for holding companies to have almost no revenue and billions of dollars in expenses?
|
I would say that it would be inefficient. I don't know if it is abnormal.
Again, are you sure you want to be using the term "holding company?" The situation you describe in your first post has nothing really to do with holding companies. Or even subsidiaries. I think you are talking about companies that use special purpose entities to shell-game losses and shelter tax.
Enron was not engaging in shady deals with subs. Enron had shady dealings with SPEs (specifically, limited partnerships in the case of Enron).
Also, in your hypo, the parent is shielding the losses of the subs so that the subs can pad their reports. That makes no sense. Do many subs file independent docs with the SEC? They are almost always part of a consolidated group.
I agree with your general sentiment.......the point you make is the reason we have Sarbox now. I am just pointing out semantics.