Question

What constitutes “significant influence” when an investor’s financial interest is below the 50% level?

Short answer

Significant influence constitutes that the investor participates in management, participation in the process of making policy, etc.

Step-by-step solution

Meaning of interest below 50% level

Interest below the 50% level means when the amount of the holding of the investor is below the level of 50% but greater than 20%.

When interest is below 50% level

When the interest of the investor is below 50%, it constitutes that the investor represents himself in the board meetings, policymaking committee, etc. These investors also check inter-company transactions. In this way, the holding of between 20% and 50% constitutes significant influence.