Spoke on BFM: Unmasking Corporate Anonymity – Beneficial Ownership

On 16 December 2019, I spoke live on BFM’s Morning Run on the Companies Commission of Malaysia proposed guidelines on the beneficial ownership reporting framework. I had written earlier about beneficial ownership in Malaysia and also 8 observations I had on the proposed beneficial ownership guidelines.

You can access the podcast here (you may be required to do a free registration on the BFM website).

Some of the points I made:

These guidelines are very comprehensive and provide much-needed flesh and steel to the existing Companies Act 2016 beneficial ownership section.

  1. A comprehensive criteria to identify the beneficial owner, or in other words, the ultimate owner or controller of companies, LLPs and businesses.
    Multiple identifying factors are listed: like 20% of the voting shares, exercising dominant control over the Board, controlling the majority of the voting rights.
  2. All Malaysian incorporated companies and registered foreign companies must comply. The guidelines spell out the detailed obligations on the part of the company secretaries and also the board of directors.
  3. Big bang approach – all newly incorporated companies must comply, the Companies Commission of Malaysia will require all companies to also comply within a 6-month time frame.
    And then ongoing disclosure obligation when companies file their annual return.

Some time will be needed for companies, shareholders, directors, and company secretaries to adjust to these wide obligations.

These guidelines also slot in to the larger beneficial ownership framework, together with Bank Negara’s anti money laundering due diligence obligations. Those cover beneficial ownership as well.

Finally, this particular law is not meant to criminalise beneficial ownership. It is to increase transparency. Law enforcement will have access to this information, and to then aid them in their combat against crime.

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