RGD, stakeholders set threshold for beneficial ownership disclosure

Madam Jemima Oware, Registrar General

The Registrar General, Madam Jemima Oware has constituted a technical stakeholder forum to fix thresholds for beneficial ownership disclosure for all the various sectors that will be incorporated into the new Companies Law, 2019 for implementation next year.

This is on the basis that the Registrar General’s Department (RGD) made provision for threshold’s to be set in the new regime to effectively govern beneficial ownership disclosure.

Aside the intent of beneficial ownership regime in assisting authorities to counteract money laundering, tax evasion, and stemming illicit financial flows, it is part of strategic measures towards complying with the 2016 Extractive Industries Transparency Initiative (EITI) global conference resolution which made beneficial ownership disclosure mandatory for all EITI implementing countries, of which Ghana is a member. It gave countries up to January 2020 to fully operationalize the disclosure regime.

Consequently, the Department brought together technocrats drawn from key sectors of the economy including members who took part in drafting the Companies Act, representatives from the Ministries, Departments and Agencies (MDAs) as well as officials from key sectors such as extractive, real estate gaming, banking, Civil Society Organisations among others to make effective contributions into the setting up of thresholds for disclosure of beneficial ownership.

Key among the discussions was the setting up of different thresholds for different sectors on the basis that the average enterprise some sectors were considered as high value as against others in relatively low value areas. Most of the participants pushed for zero percent stake, meaning that all persons having a stake more than this figure in a business enterprise must disclose beneficial ownership including politically exposed persons.

Importantly, having such mechanisms in place was seen as the right implementing factor in the regard that having one percent stake in an enterprise in the extractive or oil and gas sector could amount to over US$100 million dollars.

Different countries and international organisations have used and prescribed varying percentages of thresholds to address their respective beneficial ownership disclosure. For instance, the United Kingdom and the European Union’s Anti-money Laundering Directive have threshold of 25 percent.

“But assuming you set a threshold of 25 percent as other countries have done, then you are going to let go as much as maybe US$500 billion because there may be more owners who fall below the 25 percent threshold”, Mr. Steve Manteaw, Co-Chair of Ghana Extractive Industries Transparency Initiative (GHEITI) however warned.

Speaking with the Goldstreet Business during the forum organized in Accra, the Registrar General, Madam Jemima Oware said her outfit has started updating its system with support from Ghana Community Network (GCNet) to properly drill down to find out the ultimate beneficial owners behind businesses.

“We need these requirements to be built into the system. If we don’t get the specification requirements properly, what it would mean is that electronically if you select a sector, say, mining or banking, the trigger will come up that you have to provide that data”, she reiterated.

Applying a threshold is expected to specify the minimum percentage of ownership – either by control, voting or shareholding rights, that will require a business entity to disclose its beneficial ownership to the Department to enable the Office extensively track Ghana’s beneficial ownership regime. What most business entities rather provide are legal proxies and shareholders of businesses leaving out the real beneficial owners.

Beneficial ownership transparency requires details of ownership of every company operating in Ghana, either national or international, to be recorded in a centrally held register by the RGD.

According to the Department, setting a threshold would prevent the registers from being inundated with lots of information, but also would ensure that certain vital data of members behind the establishment of businesses is not overlooked.