ABSTRACT
In the latest empirical survey of the ownership structure of large corporations in 27 wealthy countries, La Porta et al. (1999) find that the presence of ultimate controlling shareholders is a rule rather than an exception in most of the world.1
Moreover, they also provide a detailed account of the various means the controlling shareholders can use to maintain and extend their de facto control in downstream firms. The most common, the pyramid shareholding scheme is frequently applied by the controlling shareholders to create a set of control chains, within which a publicly listed company (PLC) may be controlled by another one, whose controlling shares in turn lie, directly or through several such similar chains, in the hands of the ultimately dominant shareholder group. So, the immediate ownership data from public corporations is not, in principle, adequate to present an accurate picture of the exact control pattern in these firms. The tracing of the ultimate shareholding structure is crucial to our understanding of ownership and control in modern corporations.
