Companies have only 18 days to furnish the government with a list of beneficial owners in a move aimed at curbing corruption, money laundering and terrorism.
Failure to disclose the information, as required by the Section 93A of the Companies Act 2015, could lead to legal action.
Business Registration Service (BRS), the government office mandated with overseeing the companies registry, gave firms up to January 31, 2021, to lodge a register of beneficial owners with the Registrar of Companies.
“To enable companies comply, the Service will grant a grace period up to 31st January, 2021 for preparation of Beneficial Ownership registers.
A Beneficial Ownership E- system manual is available on the BRS system portal to guide users,” said BRS Director General, Kenneth Gathuma, in the October statement.
“The Beneficial Ownership Register will create greater transparency in the ownership of companies in Kenya and support the government in the fight against corruption, money laundering and financing of terrorism,” he added.
Samuel Nyandemo, a senior economics lecturer at the University of Nairobi says the move will only help partly in rooting out corruption money laundering.
“I think the process of registration of these companies is a bit dubious, meaning it might not help the government achieve its intended objectives.
Nevertheless, if we go to the true owners, then it might help the government to scale down money laundering and streamline the operations of those companies,” Nyandemo said.
As per the Act, all registered companies are must keep a register of their beneficial owners and lodge the same with the Registrar of Companies.
It requires companies to submit a copy of the Beneficial Ownership Register within 30 days of its preparation and notify the Registrar within 14 days of any change in Beneficial Ownership information.
Failure to comply with this requirement is an offence to the Company and every officer of the Company who is in default.
This even as the Director of Public Prosecutions, Noordin Hajji, ordered March 2020 five local banks to pay a total of Sh385 million for violating anti-money laundering laws warning that such actions would be prosecuted in future.
These are KCB Group, Equity Bank, Co-op Bank, StanChart and Diamond Trust Bank.
BRS defines a beneficial owner as the natural person on whose behalf a transaction is conducted.
The Business Registration Service is a semi-autonomous body under the Office of the Attorney General established by the Business Registration Service Act, 2015.
A report by United Nations Conference on Trade and Development dubbed Economic Development in Africa Report 2020 ranked Kenya position 24 globally ahead of Nigeria (34), Angola (35), Egypt (46) Mauritius (51), Cameroon (53) and South Africa (58).