Aleph and beneficial ownership: working up from the ground

Within the EITI process, the issue of beneficial ownership has gained momentum. After a successful pilot phase to which 11 countries voluntarily signed up, the 2016 EITI standard now requires all 51 implementing countries  to ensure that companies disclose their beneficial owners. These are early days, however, and so far reporting on beneficial ownership is showing significant gaps, as well as a high degree of variance in the information that is disclosed.

So what can you do to find out about the owners of a company, if the information is not yet available in an EITI report? And even if it is, how can you verify that the information provided is actually correct? Financial regulators in many countries already require companies to disclose information on their shareholders and subsidiaries, so that our corporate filings database Aleph can help you to find it – and here is how.

1) Who is controlling Kansanshi Mining PLC?

Let’s have a look at Zambia’s 2014 EITI report. On p.15, we find a chart with the top 5 payments to government by operating company. We see that combined, they make up for 70% of all payments to the government of Zambia. Of special interest is Kansanshi Mining Plc, which alone accounts for 32.86% of the payments. So what is the parent company of Kansanshi Mining Plc? Since we are dealing with the 2014 report, we will try to find a filing from 2014.


Example Aleph search term “Kansanshi mining Subsidiaries 2014″~50

Search for the name of a company, ‘subsidiaries’ and ‘year’ in proximity of fifty words, the distance within which all included words should be from one another.

The search leads us to First Quantum’s annual information form for 2014, filed to the Canadian Stock exchange authority’s filing system SEDAR. On page 5, the report includes a hierarchical table with its subsidiaries. Here, we learn that First Quantum has an 80% interest in Kansanshi Mining Plc. Other top-players from the EITI report are also included in the list. Kalumbila Mines Ltd belongs to First Quantum, which has a 100% interest in the operation, as well as First Quantum Mining and Operations Ltd. But to whom do the other 20% of the Kansanshi operation belong? Further down on p.15, the project has its own section. First Quantum states that the other 20% of Kansanshi are owned by a subsidiary of Zambia’s state-owned ZCCM.


In this case, we have been able to confirm the information provided by the ZEITI report, which includes a list of beneficial ownership structures on p.128.

2) Mopani Copper Mines Plc

Things become more interesting, however, if we look at another company in the Zambia EITI report: Mopani Copper Mines Plc, the third largest contributor to government payments. Trying the exact same search terms in Aleph will lead to a miss. So we adjust them:

Example Aleph search term “Mopani Copper Mines Subsidiaries”~100
Search for the same terms as before, but without a date and widen the proximity from fifty to hundred.

The new search leads us to reports from mainly two companies; Glencore Plc and Katanga mining Ltd. Since we are looking for the ultimate owner, Glencore is a more likely candidate, because it is a multinational enterprise. A 2014 report is included, with a listing of ownership structures. On p. 186, we read that Glencore has a 73.1% interest in the Mopani Copper Mines Plc. This time, the information provided by the Glencore report does not match ZEITI’s information. According to the latter, Mopani copper Mines Plc is owned by 73.1% by First Quantum, 16.9% by Glencore Xtrata and 10% by a ZCCM subsidiary. Strikingly, we have the exact same figure for the majority owner, namely 73.1%. It looks as if the ZEITI report confused  both companies.


Glencore BO

Glencore Annual Report 2014, p.186 (highlight added)


To summarise: using our Aleph database helped validating the figures stated in the EITI report, and in the second case, it even helped identifying mistakes. In other cases, the database can help filling out missing information about stakeholders. However, it is also important to note that the availability of information depends on the respective financial regulations. Keeping this in mind, the Aleph database proves to be a powerful tool to complement existing research as well as to support access to publicly available data on intercompany ownership structures.

Of course, all this is Aleph working networks of corporate affiliation structures – so it is not yet leading to the ultimate beneficial owners, which will always be a natural person. We will follow that up in a separate post.

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