Daintree and Hong own 55% and 45%, respectively, of the common shares that carry voting rights at a general meeting of shareholders of Moor. Hong also holds debt instruments that are convertible into common shares of Moor. The debt can be converted at a substantial price, in comparison with Hong’s net assets, at any time, and if converted would require Hong to borrow additional funds to make the payment. If the debt were to be converted, Hong would hold 70% of the voting rights and Daintree’s interest would reduce to 30%. Given the effect of increasing its debt on its debt-equity ratio, Hong does not believe that it has the financial ability to enter into conversion of the debt.
Required
Discuss whether Hong is a parent of Moor.