Leakage

Leakage means the stripping out of value from the target company after the date of locking the financial statements for the benefit of the seller. Leakage usually involves payment of dividends, bonuses for managers and employees, or the sale of assets at inappropriately low prices. However, these restrictions may also be applicable to planned investments, hiring and dismissal of employees, requirements for timely payments of liabilities, etc.

Expenses related to the day-to-day operation of the company that do not affect the final price, such as employee salary payments or payments of intra-group liabilities complying with the arm’s length principle, are not considered to be leakage.

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