Out of total 92,000 companies registered with the Securities and Exchange Commission of Pakistan (SECP), the commission has struck off 3,000 names of inactive companies from registers in 2017-18 to avoid any misuse of their accountts or suspicious transactions This was stated by Waseem Ahmad Khan, additional director, Corporatisation and Compliance Department, while giving a briefing on SECP's regulatory framework for beneficial ownership here on Thursday.
The SECP has the powers to strike off names of inactive companies from its record. During 2017-18, these dormant companies are no more part of the active companies of the SECP.
Waseem Ahmad Khan said that beneficial owners are natural persons who ultimately own or control a customer and/or the natural person on whose behalf a transaction is being conducted. It also includes those persons who exercise ultimate effective control over a legal person or arrangement. The legal persons can also take the form of offshore companies as any shareholder can form a company or its permission under bearer share certificates and many other factors.
The record of the information is being maintained by the Commission in the Companies' Global Register of Beneficial Ownership. To-date, investment of 559 individuals amounting to Rs 50 billion approximately has been reported by the Companies. The information is being shared with State Bank of Pakistan, Federal Board of Revenue and investigation authorities as and when required by them. In certain cases, Beneficial Ownership (BO) information was also provided to foreign, counterparts/ authorities in Dubai, Hong Kong and Saudi Arabia, up on request, Waseem Ahmad Khan said.
The information of beneficial ownership ensures an accurate disclosure regime, helps in detection and prevention of financial crimes, enhances investor confidence in financial and capital markets and protects the interests of minority shareholders, he said. The FATF recommendations require countries to take measures to prevent the misuse of legal persons for ML/TF purposes, and ensure that there is adequate, accurate and timely information available with the companies on the ultimate (actual) beneficial ownership and control of legal persons that can be accessed in a timely manner by competent authorities. Legal person refers to any entity other than natural person that can establish a permanent customer relationship with a financial institution or otherwise own property, he explained.
The FATF requires member countries to have mechanisms that identify and describe different types, forms and basic features of legal persons, processes for the creation of those legal persons, and processes for obtaining and recording of basic and beneficial ownership information which should be publicly available, Waseem Ahmad Khan explained.
He said that the SECP acquires the information of BO under the Companies Act, 2017, as well as limited liability partnerships under LLP Act, 2017, which is publicly available at the office of the registrar concerned from where it can either be inspected or certified true copies of the statutory returns be obtained on payment of a nominal fee.
Moreover, the SECP also issued a circular that required companies having legal persons as members or shareholders to take reasonable measures to obtain and maintain up-to-date information relating to their ultimate beneficial owners in a register of ultimate beneficial ownership. Ultimate beneficial owners have been defined as natural persons or individuals who ultimately own or control the company through direct or indirect ownership of not less than 10% shares, voting rights, ownership or controlling interest in that company, Waseem Ahmad Khan added.
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