A helping hand…

November 24, 2003

Helping out your child isn’t necessarily a bad thing. But when you’re a public company and that help starts to approach the high six figures (or seven figures depending on whether you’re reading the 10-K or the proxy), investors deserve a bit more information. On Friday, Net2Phone (NTOP) filed its proxy and noted that it paid $47,856 to a cafeteria company owned by Samuel Jonas, son of company chairman Howard Jonas to provide food services at its Newark, N.J. headquarters. That’s in addition to the $664,000 that was recently disclosed in the proxy for IDT Corp. (IDT) , another company that the elder Jonas, 47, serves as chairman of. But in IDT’s recent 10-K, the $664,000 turns into a cool million, which seems like a pretty big adding mistake when you’re talking about sandwiches and french fries. It’s also a worrisome trend. There’s already a lot of related party transactions going on at IDT: a sister on the board and in a key executive position, multi-million insurance policies being sold by a company owned by Jonas’ father and brother-in-law. The question is whether Jonas’ eight other children will also get similar deals as they start to get older.

Leave a Reply

You must be logged in to post a comment.