Justifying the Financial Markets

There is a growing concern within the financial sector about companies using short-term funds to finance long-term projects instead of raising long-term capital through the GSE. A classic example is the case of Astek industries, producers of Insu mineral water and Refresh fruit drink, which is in financial distress such that its assets are being auctioned to offset its indebtedness to a merchant bank. Its total debt is 14 billion and most of these debts are short-term funds which were used to finance long-term projects. If Astek had been a public quoted company, it could have raised capital either through rights issues or offer bonds to the investing pub...