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Anti-graft group moots registry for company beneficiaries to curb money laundering

Anti-graft group moots registry

This article first appeared on The Malay Mail


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Transparency International Malaysia (TI-M) urged Putrajaya today to establish a central registry to identify the real benefactors of companies registered domestically and in tax haven spots like Labuan.Its president Datuk Akbar Satar said in a statement that the move could provide more transparency and help curb money laundering as the names of benefactors are accessible to the authorities.

“The goal of registry for beneficial ownership is to provide greater transparency as to ownership and who really controls a company so as to distinguish between the registered shareholder and the ultimate beneficial owner when the two persons are not the same,” he said.

“This move also ensures corrupt officials and politicians will be unable to award themselves through their families or cronies any government contracts.” Akhbar added that a central registry for company ownership will promote good governance and prevent corrupt officials from using these companies for illicit businesses.

“Such accountability will attract investors who will be able to access information and scrutinize relevant data when considering an investment. “The government should ensure that all information related to who ultimately controls or benefits from companies are included in a central business registry which is accessible to the public,” he said.

It could also help identify and report suspicious activities, he added. TI-M noted that KPMG had, in its 2013 Fraud, Bribery and Corruption Survey, found most of its respondents deemed bribery and corruption to be the biggest problem for businesses in Malaysia. Meanwhile, PWC’s Global Economic Crime Survey 2016 showed that bribery and corruption increased from 19 per cent in 2014 to 30 per cent in 2016.

It also estimated that global money laundering transactions comprise 2 to 5 per cent of global GDP, or roughly US$1 trillion to US$2 trillion annually. Yet based on the United Nations Office on Drugs and Crime (UNODC), less than one per cent of global illicit financial flows are seized by authorities. Akhbar said this made the need to establish the central registry more pressing.

“The requirement for disclosure of beneficial ownership can help in stopping the proceeds of corruption, transnational crime and organized crime from being laundered through investments in high-value property in Malaysia. “Apart from damaging economic and capital flow, these illegal activities have a greater impact on our society and the image of Malaysia,” he said. 

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