KUALA LUMPUR: Beginning next year, companies must disclose their owners under new laws to address the problem of illegal businesses and shell companies, the Companies Commission of Malaysia (SSM) said.
SSM said the requirement falls under the Beneficial Ownership Transparency framework, which it hopes to implement by the first quarter of 2020.
Beneficial ownership refers to individuals who invest in, control, or reap gains from an asset, such as a bank account, real estate, company, or trust, but who are not listed publicly as legal owners.
SSM said companies which fail to reveal their owners are liable to a compound fine of up to RM50,000.
“We are giving them time as some of the owners may be overseas,” said Norhaiza Jemon, who heads CCM’s Regulatory Development and Services Division.
She said SSM has collected views from stakeholders and will start guiding companies on updating their information.
She also said there are some 700,000 active companies at the moment and another 1.8 million which are inactive.
“The challenge will be to ensure the information given is accurate,” she added.
Norhaiza, in her speech at the function, organised by Transparency International Malaysia and Malaysian Reform Initiative (Mari), said some companies may be exempted from the new regulations.
Some of the companies are financial institutions and public listed companies, but the exemption does not include subsidiaries of public listed companies.
Meanwhile, MACC chief Latheefa Koya, in her closing speech at the function, said beneficial ownership information will not only prove important to the authorities and law enforcers, but also for the corporate sector to carry out due diligence exercises.
“Ultimately, it will shed light on the true ownership and provide transparency in the management of any company when it’s about to get into a partnership or any other business relationship,” she added.