Financial Engineering as an Alternative Veil for the Corporate Group

European Company Law, Vol. 13, No. 5, 2016

University of Oslo Faculty of Law Research Paper No. 2016-01

10 Pages Posted: 10 Feb 2016 Last revised: 8 Jan 2017

Date Written: February 8, 2016


This paper analyses the fundamental question of how to identify a corporate group in the era of both organizational-decoupling and equity-decoupling. The modern complexity of corporate structures is facilitated by a web of intermediaries. On the one hand, corporate scandals have shown how the use of organizational structures comprising a web of legal entities and legal arrangements has actively provided a vehicle for regulatory evasion, i.e. Enron, Starbucks and Citibank, to name a few. On the other hand, corporate complexity has been taken to another dimension by the derivative revolution since the 1990s, enabling equity-decoupling of the interconnected entitlements traditionally connected to a share. The decoupling phenomenon provides a new challenge in identifying corporate control and thereby gaining an understanding of where the modern corporate group structure begins and where it really ends. The fundamental question is whether sufficient control as the fundamental criterion for group establishment remains unidentified: in this case, the legal framework would not consider the corporate relation as a corporate group, and hence, no corporate liability claims can be addressed. This situation would imply an additional corporate veil, facilitated by the complexity and opaqueness that can be created by clever consultants. Such a veil would serve as a legal barrier due to the fact that the factual control or influence by one corporate entity over another is concealed through either or both layers of legal entities (subsidiarization in the broad sense of the term), or by financial engineering providing full or partial control through synthetic shareholding.

Keywords: Corporate liability, corporate control, organizational decoupling, equity-decoupling

Suggested Citation

Anker-Sørensen, Linn, Financial Engineering as an Alternative Veil for the Corporate Group (February 8, 2016). European Company Law, Vol. 13, No. 5, 2016, University of Oslo Faculty of Law Research Paper No. 2016-01, Available at SSRN:

Linn Anker-Sørensen (Contact Author)

Ernst & Young Norway ( email )


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