Ultimate Ownership and Control in Russia

54 Pages Posted: 9 Mar 2016

Date Written: May 7, 2007


I investigate ultimate control and ownership patterns in Russian publicly traded companies. I show that these companies are controlled either by the state or by anonymous private owners. Federal and regional governments’ control is exercised through extensive use of pyramids. Private owners widely exploit legal loopholes that allow them to mask their holdings and identities through nominee and foreign offshore arrangements. The comparison of formal and informal ownership disclosure reveals that the typical anonymous owners are insiders and that in virtually all cases the market participants “know” who the real owners are. Collectively, the evidence suggests that the legal weaknesses in disclosure requirements are important determinants of country-specific ownership and control structures.

Keywords: Ownership, Corporate control, Transparency, Corporate governance, Russia

JEL Classification: G32, G34, L33

Suggested Citation

Chernykh, Lucy, Ultimate Ownership and Control in Russia (May 7, 2007). Journal of Financial Economics (JFE), Vol. 88, No. 1, 2008. Available at SSRN: https://ssrn.com/abstract=2745279

Lucy Chernykh (Contact Author)

Clemson University ( email )

School of Accountancy and Finance
Clemson, SC 29634
United States

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