Ethics and governance in the European Financial centers

I went through the Memorial C (the Luxembourg Corporate Registration) and I found a really strange situation that is worth commenting.

We have Company A with Mr X as Subscriber and director of Company A.
The object of this Company is the holding of participations, in any form whatsoever, in Luxembourg and foreign companies, the acquisition by purchase, subscription, or in any other manner as well as the transfer by sale, exchange or otherwise of stocks, bonds, debentures, notes and other securities of any kind, and the ownership, administration, development and management of its portfolio. The Company may also hold interests in partnerships.

We have Company B with Company A as Subscriber. Mr X who is Subscriber and director of Company A is appointed statutory auditor. Mr X havs the same professional address as the two directors of Company B
The object of this Company is the holding of participations, in any form whatsoever, in Luxembourg and foreign companies, the acquisition by purchase, subscription, or in any other manner as well as the transfer by sale, exchange or otherwise of stocks, bonds, debentures, notes and other securities of any kind, and the ownership, administration, development and management of its portfolio. The Company may also hold interests in partnerships.


Why the object is duplicated?
How the statudory auditor of the second company can do the job as he is subscriber and director of Company A that is subscriber of Company B?
What is the independance of the statutory auditor of Company B?


Such situations are definitely a risk for the reputation of the Luxembourg jurisdiction.