Moody's Found Wild Red Flags in Review of 472M Companies

Including a 943-year-old director
By Kate Seamons,  Newser Staff
Posted Jan 28, 2024 8:10 AM CST
Moody's: One Shell Company Has a 943-Year-Old Director
   (Getty Images / Martin Barraud)

Being the director of a company is impressive. Being a 943-year-old director is ... a big red flag, at least in Moody's Analytics' view. On Monday it released a special report detailing what it calls the "seven indicators of shell company risk" based on the findings of its Moody's Shell Company Indicator, which pored over data related to about 472 million companies in November. The aim was to identify red flags that could be evidence of shell companies "that are potentially being misused for illegal purposes."

Shell companies can certainly be legitimate, but they can also be used to launder money, can be a way for sanctioned individuals to cloak their business ownership, or can hide crimes like tax evasion. Moody's found more than 900,000 companies raised two or more of the seven flags, and Fortune zeroes in some of the more colorful ones: outlier age, mass registration, and financial anomalies. Details:

  • The average age of registered company directors in Moody's database is a reasonable 52 years. And yet Moody's tool found 4,535 directors who were between the ages of zero and 5, and one who was allegedly born in the 11th century—the aforementioned 943-year-old, who is supposedly a minority shareholder of a Belgium-based company. Another 2,264 directors are age 123 or older.

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  • Having multiple companies registered to a single address is one thing. But Moody's found that in the past 25 years, 61,000 companies have been registered to one address in a strip mall in Pretoria, South Africa. More than 22,000 companies are registered to Egypt's Giza pyramid complex.
  • Making money is great, but reporting $2 billion in revenue when you have a single employee? Red flag. Moody's shares the case of a China-based textiles and clothing manufacturer with a sole worker who reported that revenue in 2019—despite the average company in that sector making about $9,300 per employee.
(Read the full findings here.)

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