Accra, Ghana//-When beneficial owners are obscured, corruption which is as “old as Adam”, is enabled. However, it could be won if governments and corporate bodies fully embrace Beneficial Ownership Disclosure (BOD).
Experts and civil society actors say the implementation of the BOD regime in Ghana and other countries would not only help in tackling corruption but support revenue mobilisation efforts for development.
This would be achieved through the lifting of the veil off the real owners of companies to ensure that they pay the right amount of taxes, reduce transfer pricing and mispricing, which have the potential of undermining efforts at domestic revenue mobilisation, Economist and Beneficial Ownership Transparency (BOT) expert, Samuel Bekoe explains at a recent three-day technical workshop to discuss the 2019 Ghana Extractives Industry Transparency Initiative (GHEITI) held at Peduase in the Eastern Region.
Who is a BO?
A beneficial owner (BO) is a person to whom specific property rights in equity belong; however, the legal title of the property may belong to a different person.
The new Companies Act of Ghana defines beneficial ownership as an individual (natural person): (a) “who directly or indirectly ultimately owns or exercises substantial control over a person or company; (b) who has a substantial economic interest in or receives substantial economic benefits from a company whether acting alone or together with other persons; (c) on whose behalf a transaction is conducted; (d) who exercises ultimate effective control over a legal person or legal arrangement”.
Identifying a beneficial owner
Indeed, for identifying the beneficial owner, the Ghanaian law encompasses both the legal right of control based on a substantial shareholding, voting rights or property and “control through any other means”. However, the country’s most advanced Companies Act does not define “substantial control” and “substantial economic benefits”.
Furthermore, beneficial owners usually have directors or shareholders who represent them though they are the real persons who benefit from the companies.
An individual has the right to exercise, or exercises direct or indirect influence over significant decisions related to the running of the business of a company including: the appointment of the managing director, chief executive officer or equivalent person; change the nature of business; amending the business plans of the company; and approval of borrowing or other significant transactions or any other decision that affects the overall direction of the company.
Politically exposed persons (PEP)
PEP is defined under the First Schedule of Act 992 to include: a person who is or has been entrusted with a prominent public function in this country, a foreign country, or an international organisation.
The Act 992 also defines PEP as a senior political party official, government, judicial or military official; a person who is or has been an executive of a State-owned company; a senior political party official in a foreign country ; and an immediate family member or close associate of a person.
Immediate family or close associates could include spouses, siblings, children, and business members associates.
After the passage of the new Companies Act, 2019 (Act 992), all entities are required to submit their beneficial ownership to the Registrar General’s Department during incorporation, filling of their annual returns, and amendment of existing information.
Ghana’s BO journey
Ghana made high level commitments to institutionalise the BO regime in 2016 at the London Anti-Corruption Summit.
The establishment of the BOD in 2020 was a key international commitment among other commitments such as Open Government Partnership (OGP), Extractive Industries Transparency Initiative (EITI), and the Financial Action Task Force (FATF), Global Forum, Ghana had signed onto for global scrutiny.
Principal State Attorney at the Registrar General’s Department, Mrs Domtie Sarpong, explains that the Companies Act 1963 (Act 179) was amended to include provisions on Beneficial Ownership in 2016.
This amendment was the Companies Amendment Act,2016 (Act 920). It was identified that there were shortcomings in the Companies (Amendment) Act 2016 (Act 920)
These shortcomings were therefore addressed in the current Companies Act 2019(Act 992). There was an initial pilot with the extractives industry to enable them to meet their January 2020 deadline of having a BO register in place.
The Electronic Register which was deployed in October 2020 at the heat of the COVID-19 crisis was rolled out in phases: phase one – extractives sector; phase two– other high-risk sectors such as the financial, real estate, gaming, used car dealership sectors; and the third phase for all other companies.
Currently, as Mrs Sarpong states all new companies are required to provide BO details before registration. While all existing companies are required to update the Department with their BOs.
Also, all companies are to update the Registrar with their BO details at the time of filing annual returns. All existing companies have up until the end of 2022 to file their BO details, following which sanctions will apply, she reveals.
The online portal feature for accessing BO information has been deployed, according to her.
Central registrar
The Registrar under the Companies Act 2019 (Act 992) is mandated to keep a register known as a Central Register to capture beneficial ownership of legal persons and arrangements.
It is to be maintained in both a manual and electronic format. The Registrar shall enter particulars of BO received from the company provided at the time of incorporation, after amendments, filing of annual returns and any information that the Registrar may require including information on the beneficial ownership.
In addition to particulars of members and their shareholding details, companies are required to also enter information of their BO in their Register of Members.
Companies shall within 28 days of making the entries and changes submit to the Registrar for registration. The register of members is open for inspection by members and any other person on payment of a reasonable fee.
Bottom line
The Registrar General of Ghana’s Registrar General’s Department, Mrs. Jemima Oware says one of the key things done to remove Ghana from the European Union’s money laundering list was the establishment of the BO register.
According to her, the implementation of the register has so far been successful, adding however that there still more to be done to enhance the registration regime.
The register also will end the lack of information about the ownership of businesses incorporated in the country, creating a “dangerous and widening gap” in the country’s fight against corruption, money laundering, terrorism financing and other forms of financial crimes.
By Masahudu Ankiilu Kunateh, African Eye Report
