PAS leaders have come out in strong support of a recent proposal by Transparency International (TI), which had called for the real owners and shareholders of companies to be made known to the public to weed out the corrupt.
Tumpat parliamentarian, Datuk Kamarudin Jaffar said the party fully supported the efforts by TI to ensure that the level of transparency be improved and that any effort in camouflaging the benefactors of these companies be rejected.
Large companies such as those making millions or billions of profits yearly, must not be allowed to hide their true owners, and in making the ownership transparent to all, the owners and shareholders would be more responsible, he told English Section June 20.
“The government in power would also benefit for example in form of taxes collected,” he pointed out.
He was of the opinion that even though some effort had been taken to improve the situation especially when involving public listed companies, it’s effects had been minimal.
“I am sure”, he said, “if the suggestions made by TI were implemented in Malaysia, there would substantial improvements in good governance especially in the private sector”.
PAS research centre executive director, Dr Dzulkefly Ahmad also lauded the proposal, saying these efforts and steps should have been implemented sooner.
“With Malaysia being mentioned as the one of the topmost countries with illicit capital outflow by Global Financial Integrity (GFI), we certainly would want these steps to be implemented in our country as well,” the former Kuala Selangor parliamentarian said when contacted recently.
“The G20 countries should implement the necessary steps and make it a global effort, and stop any illicit outgoing and incoming money,” he added.
There are many tools being used by these corrupt people to make them richer, such as money laundering, trade mispricing and the use of tax havens.
If the G20 countries could clean up their act, the rest of the world would follow, and I am confident the world economy would be in a much better situation compared to what it is right now.
TI on June 19 called for the G20 officials meeting in Australia to be held later in the year, to make it harder for the corrupt to hide behind secret companies.
Today many leading economies do not require or record information about who really owns or controls companies registered in their country, making it easier for corrupt individuals, terrorists or organised criminals to hide and shift their stolen wealth, it said in a statement.
“By making it mandatory for business registers to include information about the ultimate “beneficial owner” and making that information public, G20 governments will help to ensure that law enforcement and the public know who really benefits from every company registered on their soil,” said Transparency International Chair Huguette Labelle.
“It is time to unmask the corrupt who hide their identity and stolen wealth behind layers of secret companies and enjoy a life of luxury with impunity”.
The call for action on secret company ownership comes just ahead of a global meeting of NGOs in Melbourne – the Civil Society 20 (C20) Summit. Huguette Labelle will speak about how Transparency International will harness its more than 100-country global network to halt illicit financial flows stolen through the abuse of power, bribery and secret deals.
Secret company ownership is a problem that goes much further than tropical tax-havens, Transparency International warned. A lack of rules on beneficial ownership also prevents the publication of important information in key G20 financial centres. At the moment, 77 per cent of business registries in the European Union do not collect the names of the real beneficial owners of companies.
This leaves the door open to abuse. A World Bank report said that among the 213 cases of grand corruption studied over the last 30 years, more than 70 per cent showed ownership of the stolen funds had been disguised through the misuse of corporate entities, half of which were secret companies.
Time for G20 to act on promises
The following recommendations, if taken up, will make a huge leap in unmasking the corrupt and shed light on the secrets of the corrupt, their money and ultimately their power.
Governments should require information about who ultimately owns, controls or benefits from companies to be included in central business registries and make them public.
As an immediate measure, governments must require companies bidding for government contracts to disclose who owns, controls or benefits from the company. This helps ensure corrupt officials are not awarding themselves or their friends, government contracts without proper scrutiny.
Countries with direct influence over secrecy jurisdictions should ensure that they establish public registers including beneficial ownership information.
Bankers, financial institutions, lawyers and accountants must ensure they are not complicit in corrupt acts by undertaking full due diligence measures. Real estate agents, casinos and other such professions must also ensure they do comprehensive background checks and due diligence on the people and companies they work with.
The G20 has already committed to adopt new high level G20 principles to prevent the misuse of legal entities, currently being drafted by the G20 Anti-Corruption Working Group. It’s crucial that these principles include concrete steps to make it harder for the corrupt to hide their identity behind corporate structures.
“After the financial crisis the G20 took on the role of making the global financial architecture more transparent and stable. Making companies more transparent, so that they cannot be used to hide the proceeds of crime and corruption is a responsibility of the G20,” said Labelle. - ES