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QuestionsCategory: Management QuadrantQuestion on indirect owning of shares
Jun Song Lim asked 3 years ago

With regards to key directors of comapnies owning shares to align interest with shareholders. If let say a chairman has an indirect owning majority of the shares in a company(e.g. he owns an investment holding thenhisinvestment holding has majority stake in the company), can I say that this would be the ideal case as compare to the chairman directly owning majority of shares? 
*For clarity of this question, you may refer to the example on silverlake axis limited annual report 2011 pg114.
Thank you,

Ang Chor Loo replied 3 years ago

Hmm…there should be no difference owning directly or indirectly…if the chairman owns majority stake in the investment holding company (which usually is set up for tax planning purposes).

Victor Chng replied 3 years ago

You are right Ang Chor. :)

1 Answers
Victor Chng answered 3 years ago

Hi Jun Song,
Indirect owning and direct owning are more or less the same. If the founder own the listco under a private company, personally I will still view it as direct holding.

Jun Song Lim replied 3 years ago

Hi victor,

Ok thanks for the clarification.

Victor Chng replied 3 years ago

welcome :)