How is it possible, that a (certain) enterprise (and its subsidiary, let's call them A & B ) own 40% combined stock of a certain third enterprise (C), if neither the enterprise nor subsidiary (A, B ) fly any planes and the enterprise (A, B ) seems to be just a "stock-holding" entity. Isn't there a requirement to have an equity of 20 million to participate in an IPO or buy stock? So how would A and B achieve that?I am looking at a real case and cannot understand how they did it.
And what is also bothering my mind is why would anyone have an enterprise and pay credits for it in order for that enterprise to just own the stock in a third company and not fly at all...
Isn't the 20M AS$ equity requirement just to participate in the IPO?
Hi,
I am pretty sure you are correct. There is no restriction on buying shares.
But (in the past) some players heavily supported the IPO of a friend by creating a company, buying shares and then deleting that company. Hence the restrictions on investing in IPO's.
This case may be a construction to give a third airline control over an airline where he has no traffic rights. Nothing wrong with that. I would not use the <report this company> button every time I see an airline that does not operate planes ;-)
Airline C (subsidiary of a big holding D) is set up on a day X. The big holding does not have traffic rights in the country, that means neither does the subsidiary. 5 Days later (X+5), the mentioned enterprise A and subsidiary B are set up and start buying the shares.
What I think happened:
Big Holding D creates subsidiary airline C and because airline C has no traffic rights, he talks to his friends and alliance to buy up shares on IPO which will later be resold back to a third party enterprise set up in the same country where the airline C was set up, this stock holding enterprise was set up by somebody (? whom?) to hold the shares so the airline C can operate with traffic rights. This enterprise A with subsidiary B buy those stocks form original IPO buyers. I still do not understand why Holding D went through so much trouble and just did not set up a new enterprise on the server (multiple enterprises allowed) but rather went through this complicated setup. Just because of interline possibility (because there is no limit on interline within one big holding, right?). Google and Facebook would be proud! But I still do not get why this shadow account that is the stockholder, no planes, no nothing, just stockholding... why pay for new account (even to somebody) rather than just go for a straight secondary holding? There is something about this setup that bothers me... there is "more to it" ...
I have an airline in China. A few months ago another player told me he wanted to start an airline in China. As none of his three holdings had traffic rights in China, he asked me to help him. So I created a subsidiary for him and put it on the stock market. My holding and original subsidiary each kept 26% of the shares, so half of the shares were Chinese. And his subsidiary bought 40% of the shares, so he had control of the airline.
It looks like thes guys are doing the same. There is nothing illegal about it.
It would be illegal if one and the same guy has two accounts under two different names... one account for holding D and a different account for holding A.
If the player behind holding A has no real holdings/airlines on any game world, the whole thing smells indeed ;-)
the majority of the shares decide the nationality of an airline, and thus its traffic rights. It doesn't matter who owns the shares... two holdings, one holding and its subsidiary, 10 airlines with the same nationality...
But the biggest share holder takes control of the airline.
It is a fragile construction though. This American airline controlled "his" Chinese subsidiary. But if I had sold the 26% that belonged to my subsidiary back to my holding, my holding would have owned 52% and I would have taken control of his airline. Or if I had sold my shares to a foreign company, the American airline would have had a subsidiary in China that lost its traffic rights.