Asset stripping refers to the unethical practice of acquiring a company with the primary intention of selling off its valuable assets for short-term profit rather than fostering its long-term growth.
This often leads to the depletion of the company’s resources, leaving it financially weakened or insolvent.
Asset stripping is criticized for prioritizing immediate gains at the expense of the company’s sustainability and the welfare of its stakeholders.
Regulators and corporate governance frameworks aim to prevent such practices to ensure responsible business conduct.