Clearer disclosure of IPO investment proceeds needed

WHEN companies prepare to go public, their marketing efforts tend to revolve around growth prospects, market opportunities and possibly their strategies to drive future success.

Yet one critical element, namely how the proceeds from the initial public offering (IPO) will actually be used, is often buried deep within prospectuses which tend to run into hundreds of pages, rather than highlighted in promotional materials.

This raises a valid question: If investors are providing capital, shouldn’t the deployment of that capital be front and centre? After all, it’s only natural when money is lent to ask what the money is for, so why isn’t this the case for IPOs?