Govt Offers Lifeline to Businesses Ordered to Reveal Secret Investors

On August 2, the government considered extending the deadline that obligates companies to reveal their beneficial owners. Business owners have been called upon to disclose their beneficiaries through the Business Registration Service (BRS) portal. 

However, the corporation described technical shortcomings on its side as a result of surging applications.

“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 a large number of applications,” explained BRS Director-General, Kenneth Gathuma. 

Business Registration System (BRS) Director-General Kenneth Gathuma in his office at a past day.

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Gathuma, also narrated that the registry had received numerous requests from stakeholders to push the deadline from the already surpassed date of July 31. The registry had issued its first deadline as of January 31.

The service has therefore granted business owners more time to fill in details as required in the soonest time possible, taking advantage of an existing backlog. After the backlog clears, consequences are set to unravel on those who are non-compliant.

Business entities that fail to adhere to this requirement would incur a hefty fine of Ksh500,000 upon conviction.

Gathuma clarified that applications filed by companies seeking to update the Beneficial Ownership information on the portal remained valid. 

The government is pursuing full disclosure of real owners of companies as part of efforts to monitor trails of illegal money. Directors and shareholders of businesses are expected to submit their home addresses, phone numbers, emails as well as the amounts of the stake owned in the registered firms.

Moreover, this step is aimed at sieving out proxy companies and entities used by investors to up their shareholding in firms and insider trading.

This move was highly prioritized in the revamped 2015 Companies Act. The act came to be through recommendation from the Financial Action Task Force on International Standards on Combating Money Laundering.

In addition to that, the government was urged to maintain adequate information on the beneficial ownership of businesses.

Under the Regulations, a beneficial owner is a natural person who directly or indirectly: holds at least ten per cent (10%) of the issued shares of the company, exercises at least ten per cent (10%) of the voting rights in the company and has the right to appoint or dismiss a director of a company.

SME owner Silas Odero of Nyakinda Construction with Co-op Bank head of business banking Moses Gitau during the launch of the Co-op Bank – Isuzu East Africa Motor Vehicle Purchase Scheme for SMEs.

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