It's late, so I hope I get this right:
The idea behind שרשור חברות in coporate law can be grasped in this link:
http://www.robolo.co.il/5/05/07/06/Robolo_116306.asp, see clause 32 (also read para above it).</br>
So, it is the "masking" of relationships, connections and ownerships of firms (connected contractually), so as to shy away from personal liability.</br>
Now imagine a number of firms "playing around" with ownership (as described in this link: </br>http://209.85.135.132/search?q=cache:XIV2ov-FSroJ:www.nevo.c..., search for the word שרשור) and you get a sordid mess...</br>
As for the definition of corporate veil, see the first link below.</br>

The result of both is the same (on the downside, the difficulty in finding the right party to blame as it were, or to hold liable).

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Note added at 4 days (2009-07-10 11:48:23 GMT)
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Happy you found the answer you needed.
You can close the question without awarding points - just write you found the answer elsewhere.