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Acams CKYCA Exam - Topic 1 Question 18 Discussion
Topic #: 1
Company A is owned by Company B (80%) and Individual W (20%). Company B is owned equally by Company C and Individual X. Company C is owned by Individual Y (60%), Individual W (10%) and Individual Z (30%). Who should be considered as a beneficial owner of Company A with more than 25% shares?
Individual Y owns 60% of Company C, which owns 50% of Company B, which owns 80% of Company A.
Y's indirect ownership in Company A = 60% 50% 80% = 24%.
Additionally, Company B's other owner, Individual X, has 50% of Company B, giving X an indirect stake of 40% in Company A, but X has no further upstream ownership through C.
FATF guidance states that indirect and direct holdings should be combined where applicable. Y's 24% does not meet the 25% threshold alone, so none of the others qualify - except if local regulation treats control via majority in an intermediate entity as passing through. In that case, Y controls Company C, which controls 50% of Company B, giving effective control over 40% of Company A - meeting the threshold.
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