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State renews plan to unmask proxy owners of firms

BUSINESS
By Graham Kajilwa | August 3rd 2021

The government wants individuals who have not disclosed their companies’ real owners in the Business Registration Service (BRS) portal to do so.

This is as it seeks to have shareholders and owners of the firms comply with new laws.

The deadline for filing the beneficial ownership register documents was reset at July 31, 2021, from the initial date of January 31, 2021.

BRS Director General Kenneth Gathuma in a statement urged private firms that had not revealed real company owners to comply by submitting a copy of the Beneficial Ownership registers to the Registrar of Companies.

“We will be issuing further communication on this in due course,” he said.

Gathuma stated that there have been requests to extend the deadline beyond July 31, 2021, to enable compliance. “We have made all considerable effort to process applications lodged at the Registry of Companies, but there are still some delays in processing pending applications due to the large number of applications,” said Gathuma.

He said applications by firms updating the Beneficial Ownership information or details already lodged on the BRS portal is still permissible.

“This will serve as a stay of the deadline for compliance for that company pending the processing of the application,” he said.

In January, the deadline was extended to encourage compliance’. “Failure to comply with this requirement after July 31, 2021, makes it an offence to the firm and every officer of the company is in default. Such an officer will be liable to a fine upon conviction,” he warned. The fine goes up to Sh500,000.

BRS Director-General, Kenneth Gathuma.

The Standard was yesterday informed that the decision by the agency noncommittal for an extension is informed by the backlog as a result of the grace period.

“The board has to sit and determine the next step once the backlog has been cleared to also give away forward on what will happen to those who have not complied,” said BRS official. “It is also then that the number of those complied against those who have not will be given to avoid creating anxiety among those who have updated their ownership,” said noted the official.

The disclosure of the real owners of companies aims at helping the government trace trails of illicit cash. The details of ownership should include the amount of shareholding, residential addresses and phone numbers.

The move will also weed out proxy companies or entities used by investors to up their shareholding in firms and insider trading.

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