noun
watered capital
Financial term for capital that is overstated relative to actual assets, often through stock watering.
その会社は水増し資本で設立された疑いがある。
There is suspicion that the company was established with watered capital.
水増し is the general term for 'watering down' or 'padding' (e.g., expenses, numbers), while 水増し資本 specifically refers to watered capital in a corporate finance context.
Compound of 水増し (mizumashi, 'watering down, padding') and 資本 (shihon, 'capital'). The term is a direct translation of the English 'watered capital'.