SHAREHOLDERS: Heavy traffic on the e-citizen portal and multiple enquiries have forced the registrar of companies to extend the deadline for companies to disclose their directors amid confusion over who a beneficial owner is.The deadline was extended to July 31 from Jan 31 this year.

“Having taken note of the progress made in filing these registers and in the spirit of encouraging compliance with the companies Act, BRS has in consultation with stakeholders granted a final grace period of six months ending July 31,” Business Registration Services (BRS) Director General Kenneth Gathuma said in a statement.

Beneficial owners

Kenyan companies have been racing to disclose beneficial owners ahead of the Jan 31 deadline in a bid to avoid Sh500,000 fine.

The government is seeking to build up a database that is critical in war against money laundering and other forms of corruption.

Critics, however, say the government already has threat information and only needs to reoganise it.

“Company directors will be fined upto Sh500,000 and will not be allowed to make decisions in the company alongside being denied dividend,” said Joseph Githaiga of PwC.

Essentially the rights you have as a shareholder are suspended until you meet those conditions.

This also comes at a time when experts are criticising the government over lack of clarity when it comes to definition of the term beneficial directors.

For instance, it is not clear whether someone who exercises significant control over the company but is not a shareholder is a beneficial owner.

“Significant control’ as per the 2020 regulations points to one participating in the financing and financial policies of a company. It is an issue bound to elicit a lot of reaction,” said Githaiga.

This means companies have to incur more administrative expenses to furnish the government with this information which it already has in its custody.

The government has in the recent years increased its appetite for big data, starting off with the Huduma Number programme. 

It was also not clear why failure by the government officials to keep the data from breaches will only attract a fine of Sh20,000 yet company directors who fail to submit their data be fined Sh500,000. 

“A person who discloses beneficial ownership information to the public risks a fine not exceeding Sh20,000 or imprisonment for a term not exceeding six months or to both,” registrar of companies said.