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Groups push for provision on beneficial ownership disclosure in new company law

  • SOURCE: LuvFm | qwesa2big
  • Players in Ghana’s extractive industry are discussing ways to restrain citizens from fronting for multinationals which invest in the country.

    Experts say the practice, known as Beneficial Ownership Disclosure (BOD), is a major breeding ground for corruption in mining as well as the oil and gas sectors.

    The Ghana Extractive Industry Transparency Initiative (GHEITI) is collaborating with Ghana Oil and Gas for Inclusive Growth (GOGIG) on the issue.

    GHEITI wants a provision in the proposed amendment of the company law to address the challenge, as stakeholder engagements continue.

    Consultant for GOGIG, Samuel Bekoe, tells Luv Business at a session in Kumasi that such a legislation will help Ghana effectively manage her resources.

    Samuel Bekoe

    – Samuel Bekoe

    The African progress panel study in 2011 showed that Africa loses about 79 billion to illicit financial flow.

    Most of them due to the activities of shell companies registered in tax havens.

    With the beneficial ownership disclosure, persons hiding behind shell companies and paper companies will be revealed.

    “We know that a lot of people in public positions will set up companies without using their names come back and win contracts for themselves, and because they are monitoring themselves they are unable to do that diligently. They will do a project and less than a year the project starts deteriorating.

    “We are looking at the benefit it can bring to Ghana and tag along with the fight against corruption”, he said.

    Officials are positive the disclosure will reduce instances of tax avoidance and evasion.

    “If we know your related parties and whether you own them or not, it will help the Ghana Revenue Authority to force you to do transactions’ on arms-length principle,” the GOGIG Consultant said.

    The Extractive Industry Transparency Initiative (EITI) global standards in 2016, demands members pass the beneficial ownership disclosure law by 2020.

    Ghana is required to implement the BOD as part of requirements for the Financial Action Task Force (FATF), an independent inter-governmental body that develops and promotes policies to protect the global financial system against money laundering, terrorist financing and financing the proliferation of weapons of mass destruction.

    It is also one of its commitments toward the Open Government Partnership Initiative, which it signed onto in 2011, as well as the International Extractive Industries Transparency Initiative.

    Among other expectations, Ghana is now required to develop an implementation framework with clear timelines to ensure that BOD stays on course, and work to meet the EITI 2020 deadline for operationalising the BOD regime.

    It is also to commit to improving extractive sector governance whilst also building the capacity of citizens to be able to use beneficial ownership data for civic engagements around anti-corruption and corporate accountability.

    Co-chairman for the Ghana EITI (GHEITI), Dr Steve Manteaw, says despite having numerous legal provisions and industry reports, aimed at deepening transparency in the oil and gas sector, these are yet to lead to meaningful accountability.

    According to him, there is lack of public interest in the various findings and reports to demand accountability from managers of petroleum revenues.

    “Notwithstanding many efforts to ensure transparency, the transition from transparency to accountability has been absent.”

    Ghana passed a law which amended the Company’s Act in 2016 to include Beneficial Ownership provision as part of the expectations. Per the provision, companies must start reporting on their beneficial owners.

    The new Company Law is yet to be sent from Cabinet to Parliament.

    Mr Bekoe wants the issue given prominence.

    “It will help Ghana effectively manage its resources,” he said.

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