‘Hidden investor’ database due to go public
Mbongeni Mguni | Monday January 23, 2023 06:00
By law, a ‘beneficial owner’ is defined as a person who directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise is the ultimate beneficiary of a share or other securities in a company.
Amendments to the Companies Act from 2018 and 2022 required the identities of beneficial owners of companies to be updated to CIPA’s Online Business Registration System (OBRS), the main online platform where all companies operating in the country are required to register.
The Authority’s Awareness and Communications manager, Marietta Magashula told BusinessWeek that while the OBRS information on beneficial ownership was currently restricted to law enforcement agencies, work was underway to make the online database public.
“Section 21 of the Companies Act has since been amended to facilitate for beneficial ownership information to be publicly available on the (OBRS) register,” she said in a written response to BusinessWeek. “The Authority is currently awaiting secondary legislation in the form of regulations, as well as working on enhancements to the OBRS in order to accommodate the requirement to make such data public. “We expect this to go live in August 2023, subject to the secondary legislation (regulations) being ready.” Magashula added: “The amendment of the Act was designed to give effect to the recommendations from the East and Southern African Anti-Money Laundering Group (ESAAMLG) and the Financial Action Task Force (FATF).”
When the beneficial ownership register goes live, Botswana will be one of very few countries in the world where such information is made publicly available. The public register will allow Batswana to see exactly who has interests in which entities and sectors, a milestone development as information on individual wealth has largely been a guarded affair. The latest developments will also be welcomed by lobby groups such as the Botswana Centre for Public Integrity which has been calling for beneficial ownership records to be made public.
Lobby groups have said making these records public would enable ordinary Batswana to be watchdogs against money laundering and other corrupt practices. Taking the beneficial ownership register public in August will also place Botswana ahead of the FATF’s expectations, even as the global anti-money laundering group pushes its member states to enhance accountability around shareholder interests.
The FATF has been shifting its international focus to ensuring that all countries develop registers of beneficial owners. However, the immediate past FATF president, Marcus Pleyer previously told BusinessWeek that while the organisation wanted to have standards on beneficial ownership developed and compulsory for all members within the next two years, it would not require its members to make registers public.
“We encourage countries to implement public registries, but bear in mind that we set standards for more than 200 countries with different legal systems and public registers may not be compatible for all countries,” he said. “We would rather say there must be a beneficial ownership system and competent authorities must have access to updated information. “We encourage, but we don’t require public registers.”
Meanwhile, Magashula confirmed that all companies registered on the OBRS have declared their beneficial owners to CIPA as required by the Act. “The law is clear in this regard and any person who fails to provide such information or falsifies it through any means is liable to criminal action being taken against them,” she said.