PT A owns 40% ordinary shares of PT B and is exposed to variable returns from its involvement in PT B. The remaining 60% of PT B’s shares are owned by hundreds of unrelated shareholders and none own more than 5% individually.
PT A owns 40% ordinary shares of PT B and is exposed to variable returns from its involvement in PT B. The remaining 60% of PT B’s shares are owned by hundreds of unrelated shareholders and none own more than 5% individually. There are no arrangements for shareholders to consult with one another and experience shows that only a few shareholders exercised their voting rights at all. The relevant activities of PT B are directed by the voting rights granted through the common shares.
Required:
1. In the above situation, does PT A control PT B? Please explain and give reasons.
2. Would your answer be the same if the remaining 60% of PT B’s shares are owned by 2 investors each 27% and 3 other investors each 2%? Please explain.
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