The voting and participating shares of Opco 1 are held by Investco 1 (30%), Investco 2 (30%) and its two founding shareholders (20% each). The voting and participating shares of Opco 2 are wholly owned by Holdco. Holdco is a CCPC whose shareholders are Investco 1 (30%), Investco 2 (30%) and the three founding shareholders of Opco 2 (13.33% each). None of such shareholders or Opco 1 or Holdco are related or associated with each other or has de facto control of Opco 1 or Opco 2.
CRA found that s. 127(10.22) was not applicable since, although Opco 1 issued shares directly to Investco 1 and Investco 2, they did not hold shares of Opco 2.