Global ownership structures are often complex, with a lot of levels, paths and circles. Cross ownership make it difficult to identify major stakeholders by following links above a threshold. Circular ownership may lead to a situation where you get a discrepancy between the direct ownership and the integrated ownership. Circular ownership may thus “hide” the cash rights of a shareholder.
T-rank use the term Integrated ownership for the ownership interest an owner, directly and/or indirectly, has in an entity. Integrated ownership is sometimes referred to as Effective ownership, Cash rights or simply Indirect ownership.
T-rank calculates the correct integrated ownership in all ownership structures.
Cross Ownership
In this anonymized example, which is not particularly complex, it will take some time to figure out that Abbigail Kemmer has an integrated ownership of almost 60% in Hirthe-Homenick. As can be seen, if one tries to identify owners above 25% by a simple bottom-up approach – following links above 25% from the company, one will miss the majority owner.
Circular ownership
In this example, which is a anonymized real world Norwegian example, Lenora seems to have a small minority stake in a couple of companies within a group:
However, the T-rank Integrated ownership score reveals that Lenora owns 100% of the analyzed company – Witting-Keebler. She also owns 100% of the other companies within the group. In this example, there are several ownership circles, leading to a high degree of indirect self ownership in all of the companies. Lenora is the only shareholder outside of the group.