Direct and indirect interests
102I Direct and indirect interests
If a corporation (A) holds securities of another corporation (B), A has a direct interest in B.
The direct interest that A has in B is to be expressed as a proportionate interest calculated by determining the percentage of B's total securities held by A.
Example—
Corporation
A holds 75% of corporation B's securities. In this case the proportionate interest of corporation A in corporation B is 75%.
Two corporations are related corporations if—
1 has a direct interest in the other; or
a series of such relationships can be traced between them through another or other related corporations.
If a corporation (A) has a direct interest in a corporation (B) which is related to another corporation (C), A has an
indirect interest in C.
The indirect interest that a corporation has in another corporation is to be expressed as a proportionate interest calculated by multiplying together—
a percentage representing the proportionate interest of A in B;
and
a percentage representing B's proportionate interest in C, and expressing the result as a percentage.
Example—
Corporation X holds a proportionate interest of 33⅓% in corporation A which in turn holds a 75% proportionate interest in corporation B which in turn holds a 50% proportionate interest in corporation C. In this case corporation X's indirect interest in corporation C is to be expressed as a proportionate interest of 12.5%.
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