During the inter-war period ... in Czechoslovakia joint-stock banks participated to a very large extent in industrial enterprises and in transport and trading companies. Numerous industrial companies clustered around the big banks, tied to them either by credits or by direct investments. In this way, the large joint-stock banks threw a net of relationships of various degrees of dependency over almost all branches of production in the country.l THE EMERGENCE OF INVESTMENT PRIVATISATION FUNDS from the Czech Republic's mass privatisation has been thoroughly documented and discussed. Now that mass privatisation is officially pronounced finished, it is appropriate to examine rather more closely the position that these most important financial institutions have come to occupy within the Republic's ownership structure. Our point of departure is the fact that these funds are themselves just one element in an ownership structure that stretches from the state, through the principal commercial and savings banks, their subsidiary investment companies that set up and administer most of the largest funds, and thence through the funds to the privatised companies themselves. At the heart of this structure is a web of cross-ownership woven between the leading financial institutions and the funds of their subsidiaries.2 The study of the characteristics of the Czech 'privatised sector' and the financial institutions at its heart was begun by Brom & Orenstein.3 This article develops the study of this subject in two ways. Firstly, we assemble data that allow us to describe and analyse the cross-ownership web, drawing out its implications both for the pattern of ultimate ownership of the privatised sector and for the funds' capacity to control the firms that they now own. Secondly, we report and analyse the replies received to questionnaires that were sent to investment funds and companies. These replies help to clarify the objectives of these financial institutions, the attempts they have made to gain control over the firms they own and the problems and opportunities created by the current legislative limitations on their activities. Taken together, the quantitative and qualitative information allows us to make a broader assessment of the significance of cross-ownership and to consider its future evolution.4 Our assessment takes place against the background of two sets of theoretical arguments: the general case for privatisation that was made at the outset of transition; and more recent theoretical writings on the question of corporate governance and in particular the experience of