Emerald Management Review:
Ultimate ownership and control in Russia

Abstract:

Purpose - To identify the ultimate ownership of Russian firms and develop patterns such that the control structure reflects legal weaknesses in disclosure,

Design/methodology/approach - Describes the evolution of private ownership in Russia, defines anonymous ownership and investor protection issues, Takes ownership data for 145 firms from 2000 to 2002, and deduces ultimate ownership among the state, anonymous ultimate owners, miscellaneous ultimate owners and unknown ultimate owners. Presents examples of each type.

Findings - Finds that identifiable individuals , financial institutions, and foreign investors own very little, while the state and anonymous private investors own a lot. Attributes corporate governance weakness to the absence of major shareholders with superior monitoring ability. Shows most publicly traded, and state, firms are controlled through pyramid structures.Indicates that anonymous owners can be traced through voting records or newspaper reports. Finds the state owns 54.0% of the sample, and 18.4% is owned by domestic outsiders,

Practical implications - Argues that the information asymmetry about the identity of the real owners is damaging to market efficiency.

Originality/value - Presents a fascinating deductive process to find out how Russia differs from its peers in terms of corporate governance.

Keywords:

Article Type:

Research paper

Reference:

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