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IMF demands identity of secret investors in firms


Economy

IMF demands identity of secret investors in firms


EASayeh

Antoinette Monsio Sayeh, the Deputy Managing Director at the International Monetary Fund. FILE PHOTO | POOL

The International Monetary Fund has pressured Kenya to disclose the identity of secret shareholders in firms with State contracts and prosecute those implicated in graft, including the Covid-19 scandal.

The IMF Deputy Managing Director Antoinette Sayeh says unmasking shareholders who secretly benefit from State deals through intermediaries disclosing and prosecuting culprits of the corrupt deals.

The Office of the Attorney General on January 27 gave companies six more months to July 31 to file beneficial ownership registers which will reveal identity of company directors including names, phone numbers and residential addresses in efforts to unmask illicit wealth.

The Ethics and Anti-Corruption Commission (EACC) also said in March it had handed over files on the alleged Sh7.8 billion Covid-19 procurement scandal to Office of the Director of Public Prosecutions (ODPP) for action.

Ms Sayeh said the disclosure of owners of companies that are awarded procurement contracts will help reduce loss of public funds to graft.

“The recent publication of comprehensive audits of Covid-19 spending, along with the forthcoming disclosure of beneficial ownership information of companies that are awarded procurement contracts, are important steps to strengthen fiscal transparency and accountability in the use of public resources,” Ms Sayeh said.

“Going forward, effective follow-up by the appropriate institutions on the findings of the audits will be essential.”

Section 93A of the Companies Act 2015 requires new firms to fill the Beneficial Ownership Information E-Register at the Companies Registry ahead of registration and existing firms to comply within the set timelines in a major shakeup of shareholder records.

The electronic register for filling data on beneficial owners started work on October 13 in a move 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 are aimed at curbing money laundering and insider trading using nominee accounts that investors have been using to side-step ownership limits in firms listed on the Nairobi Securities Exchange.

Ms Sayeh sentiments were contained in statement following the release of second tranche of Sh43.86 billion ($407million) which is part of the IMF’s $2.4 billion (Sh258.65 billion), 38-month financing programme.

Kenya got first disbursement amounting to $314 million (Sh33.84 billion) in April.



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