Are you a secret investor in a company? The State will soon access your data

The new regulations compel firms to reveal the identities of secret shareholders who control more than 10 percent in the companies.

Photo credit: File

The Attorney-General has started collecting names, phone numbers and residential addresses of investors who own more than 10 per cent stakes in companies through secret accounts in efforts to unmask illicit wealth.

The State Law Office has launched an online portal to host the beneficial ownership registers, which will show the ultimate significant owners of both private and public companies.

It is now a prerequisite for new firms to fill the beneficial ownership registers ahead of registration and existing firms will next month be offered a deadline when they will be expected to update their shareholder records.

The Registrar of Companies says electronic register for filling data on beneficial owners started work on October 13 under plans that will see the records made available to the Kenya Revenue Authority (KRA), security agencies and the Financial Reporting Centre —which tracks illicit wealth.

The new rules, which are aimed at curbing insider trading, will shed light on market activity by curbing the use of nominee accounts that investors have been using to side-step ownership limits in firms listed on the Nairobi Securities Exchange.

They are also aiming to curb money laundering by revealing the true identify of investors owning large blocks of shares in both private and listed companies, who will also be of interest to the taxman.

Before the rules on secret company records took effect, firms were expected to file a register of members, containing date of share acquisition, share ownership and shareholder names including nominees.

This allowed companies not to name controlling shareholders in the quest to conceal their true ownership.

The new regulations compel firms to reveal the identities of secret shareholders who control more than 10 percent in the companies to the Attorney-General through the Registrar of Companies.

The details required for filing include names of the substantial shareholder, KRA PIN, national ID or passport copies, postal address, residential address, occupation, telephone number and the date when the investor became a beneficial owner.

The burden of providing the details to the State rests with companies, who risk a fine of Sh500,000 and a penalty of Sh50, 000 for every day in breach.

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