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The Shareholders of Baraka Ltd are shocked that even after the company made a record profit of Sh.3.2 billion, the directors have not recommended any

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The Shareholders of Baraka Ltd are shocked that even after the company made a record profit of Sh.3.2 billion, the directors have not recommended any cash dividend given that the company's bank account reflects an overdraft of Sh.800 million. The shareholders suspect massive corruption among the managers given the negative bank balance in spite of the massive profits. Explain why the shareholders should not be a haste to replace the managers at the AGM on the grounds of their suspicions. [3 Marks]

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