Company’s shares


From “Oil Nationalisation and Managerial Disclosure: The Case of Anglo-Iranian Oil Company, 1933-1951”

Chapter 4: Profit distribution by the AIOC


The Memorandum invoked the Iranian government‟s desire to convert Iran‟s
participation in the company‟s reserves into the form of shares of the company, as in the case of shareholders[617]. The AIOC countered that the capitalisation of reserves by the issue of ordinary shares in no way enhanced the earning capacity of either a company or the total sums available for distribution to shareholders[618]. Moreover, the company contended that in any event the Iranian government‟s participation rights were fully secured, regardless of the nominal holding of shares “since these rights are related to the total amount allocated for distribution to ordinary shareholders and not to the proportion paid out per individual share”[619]. The above illustrates that the AIOC was not willing to issue ordinary shares to the Iranian government and preferred to retain the money in the company‟s reserve. As always, the company was unwilling to compromise in order to satisfy the Iranian requirements, all the while giving reasons which defended its own point of view.

617. Gidel Memorandum, 6.

618. Ibid, 24.

619. Ibid, 24.


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