The Division of Ownership and Control in Listed Jordanian Firms

Firms listed on the Amman Stock Exchange (ASE) represent an important part of the economic activity in Jordan with 63.5% of market capitalization to GDP in 2016. However, there is little known about the ownership of Jordanian listed firms. This study is the first to document in details the ownership and control structures of more than 200 firms listed on the ASE. In this study I document the immediate ownership of shareholders who control over 5% of the votes in the sample firms. If principal shareholders are legal entities, I identify their owners, the owners of their owners and so on. Then, percentage control is computed using the weakest link rule to identify the ultimate controller at different cut-offs. If the corporation is identified as closely held I assign it one of the following identities: Family, Foreign, State, Widely Held Financial Institution, Widely Held Corporation and other. The study shows that around one third of listed firms are single firms with virtually no deviation between ownership and control. Single firms are mostly owned by families. The other two thirds of listed firms are group affiliated. In some cases control of group affiliated firms is enhanced by their ultimate controllers by the use of pyramids and cross holdings which leads to a diversion of voting rights and cash flow rights especially at the 5% and 10% levels. The control of group affiliated firms is mostly in the hands of families with some groups controlled by foreigners (mainly from the Saudi Arabia) and the state. Finally, corporate wealth is concentrated among a small number of investors, mostly families.