‘Disclosing beneficial ownership details is not a breach of privacy,’ experts say

A beneficial owner is defined as any individual who directly or indirectly has control over a company or owns at least 25 percent of the company’s stake. While in the past it was not mandatory for corporates to disclose such information, the government in October 2020 introduced an online beneficial ownership registry to keep track of such individuals with links to local firms, with the deadline, set for July 2021, having expired already.

According to the Registrar of Companies Business Registration Services Joyce Koech, by allowing beneficiary owner information to remain anonymous Kenya will continue recording instances of debatable financial transactions which might end up morphing the country into a nest of illegal financial activities.

“It is important to address transparency, providing the information of shareholders, directors and beneficial owners is not a breach of privacy,” she said.

“When we start talking about beneficial owners, what we are looking at is who exactly controls this company.  Is there a possibility that the people we are seeing as shareholders do not necessarily own the company?”

Koech was speaking as part of a panel interview on Citizen TV's Monday Report show alongside CEO Liroja Services Malachi Adede and Transnational International Kenya Programmes Manager Abraham Misoi.

On his part, Misoi stated that failure to link companies to their beneficial owners might prove detrimental in the event a graft scandal occurs in a corporate, citing that law enforcement agencies would be impeded from positively identifying and bringing said graft enablers to book. 

“If there is no individual linked to that company it becomes hard for the investigative authorities to carry on with investigations and at the same time take these people to court in corruption-related cases,” he said. Malachi

Adede also added that there was no nexus between transparency and privacy citing that instances of illegal awarding of tenders will also decrease with beneficial ownership information no longer anonymous. 

“There are people who hide below the legal person to do acts that are not legal so you use it for tenders and you submit 20 companies that have people you fronted,” he said.