THE Malaysian Anti-Corruption Commission and the Companies Commission of Malaysia are gearing up to compel companies to reveal beneficial ownership to combat graft and money-laundering.

“Unmasking the ultimate or beneficial owners of these entities are vital in identifying criminal and corrupt figures that continue to benefit from their schemes by hiding behind such arrangements,” said MACC chief Latheefa Koya, in Kuala Lumpur, today.

A beneficial owner refers to a person who owns or benefits from a company or trust fund and the income it generates, without being on the record as being the owner.

“In the recent past, we have seen such legal persons being abused for the benefit of money launderers, tax evaders and corrupt figures,” Latheefa said during her keynote address at the forum, Unmasking the Corrupt Through Beneficial Ownership Transparency organised by Transparency International Malaysia.

“This has come to light with global exposes like the Panama Papers and Paradise Papers that showed a bewildering number of layers of ownership of offshore companies, which ultimately led to certain individuals reaping unlawful benefits and escaping law enforcement.”

Latheefa said enforcement agencies in Malaysia have also received reports of politicians sitting behind large corporations and reaping benefits from foreign investors doing exploration exercises and business in the country.

She noted a provision exists in the Companies Act 2016 (CA 2016) that deals with beneficial ownership.

“But perhaps it does not go far enough. However, the proposed BO (beneficial ownership) reporting framework at the Companies Commission of Malaysia will give strength to the provision and get companies to obtain, report, verify and update BO information in a timely manner.”

According to the framework, a person who holds shareholding or ownership interest of more than 20% or where the person controls a corporate entity or multiple corporate entities holding more than 20% shareholding or ownership interest, is an indication of indirect ownership.

Latheefa said it will be the duty of the company secretary to ensure the BO data is accurately filed and kept up to date.

She added that the MACC also recognises the need to include a provision in the MACC Act as well, in order to criminalise such practices that enable corruption to take place.

Meanwhile, CCM regulatory development and services division secretary Norhaiza Jemon said in a presentation that she hope the framework will be implemented by the first quarter of next year.

She said companies will have six months from the announcement date to comply after which the registrar will invoke its powers to compel the company to do so, failing which it can fine the company up to RM50,000.
 
Also speaking at the forum were economic counsellor at the French embassy in Malaysia, Emmanuel Ly-Batallam; Transparency International Malaysia secretary-general Raymond Ram; and MACC anti-money laundering division deputy director Mohamad Faizal Sadri.

Centre to Combat Corruption and Cronyism (C4) executive director Cynthia Gabriel was the moderator at the question-and-answer session. – December 12, 2019.