Companies soon required to submit info on beneficial owners

The Companies Commission of Malaysia is going to impose a new guideline, starting next year, requiring all companies registered in the country to submit information on their respective beneficial owners.

According to CCM Regulatory Development and Services Division director Norhaiza Jemon (above), the commission intends to implement the guidelines in early 2020.

Companies will have six months from the starting date to comply with all the requirements, she told a forum on "Beneficial Ownership" held in Kuala Lumpur today.

"CCM intends to implement the guidelines by early next year. So from the effective date, companies have six months to comply with all the requirements.

"After six months, the registrar will invoke our powers to inquire into all the information to be submitted to the registrar," said Norhaiza.

She was speaking as one of the panellists at the forum which discussed threats of beneficial ownership hiding in the shadows and ways to address the problem.

Beneficial ownership basically refers to anyone who has the ultimate control over a company without being on record as the owner.

According to the new CCM guidelines, beneficial owners also include any individual, either directly or indirectly, having interest in at least 20 percent of a company's shares; holding at least 20 percent of the voting shares or has the right to exercise significant influence or dominant control over a company or its directors.

However, according to Norhaiza's speech at the event, financial institutions and public-listed companies, among others, are exempted from the new regulation. The exemption does not include subsidiaries of public-listed companies.

Norhaiza told reporters later that they expect to implement the new guidelines the latest by the end of the first quarter of next year.

CCM would extend further assistance and guidance to companies on how to comply with the new guidelines during the six-month period, she added.

While stressing that CCM would be using the guidance approach at the early stage, she said that any company or its shareholders who refused to comply could be punished with a maximum RM50,000 penalty.

MACC needs provision on beneficial ownership

Meanwhile, MACC chief Latheefa Koya (below), in her closing remarks at the event, said the anti-graft commission, too, needed provisions in its laws to address issues of beneficial ownership.

She said it was necessary to criminalise such practices which enabled corruption.

"It is also good to note that beneficial ownership information will not only prove vital to the authorities and law enforcement agencies, (but) it can also be used in due diligence exercises performed in the corporate sector.

"Hence, (it will) ultimately shed light on the true ownership and transparency in the management of the company when it's about to get into an arrangement, partnership or any other business relationship.

"While there is much work ahead, I firmly believe that it is time for Malaysia to move towards greater beneficial ownership transparency in its fight against corruption and abuse of power," said Latheefa. - Mkini