Mr Speaker, I rise tosupport the Motion. In so doing, I present your Committee'sReport.
Introduction The Companies (Amendment) Bill,2016 was presented to Parliament andread the First time on Monday, 18th July,2016. In accordance with article 106 (4)and (5) of the Constitution, and Order 179of the Standing Orders of the House, MrSpeaker referred the Bill to the Committeeon Constitutional, Legal and ParliamentaryAffairs for consideration and report. The Committee met to deliberate on thereferral. In attendance were the HonAttorney-General and Minister forJustice. Mrs. Marietta Brew Appiah-Opong, officials from the LegislativeDrafting Division of her Ministry andofficials from the Registrar-General'sDepartment. Members of the BusinessLaw Reform Committee of Experts werealso in attendance. The Committee isgrateful to them for their assistance.
Reference The Committee referred to thefollowing documents during its delibe-rations:
i. 1992 Constitution; ii. Standing Orders of Parliament;and iii. The Companies Act, 1963 (Act179).
Background The Companies Code came into force in1963, after Prof. Gower's Commission hadengaged with the private sector,particularly the business community andhad considered their views on newapproaches to company legislation. TheCompanies Code, 1963, now referred toas the Companies Act, 1963 (Act 179),
pursuant to the Laws of Ghana (RevisedEdition) Act, 1988 (Act 562). Due to changing circumstances andexperiences in the world of business, ithas become necessary to do a holisticreview of the Act, after decades of itsoperation. There is a global consensusthat, central registers of companies are themost effective way of indicatinginformation on the beneficial owners ofcompanies, to tackle corruption, moneylaundering and terrorism. This is because, experience the worldover has shown that, the identity ofbeneficial owners of some companies areshrouded in secrecy and this has thetendency of fuelling global corruption,money laundering, movement of illicitmoney inflows into countries andfinancing of terrorism. Ghana is also being called upon tointroduce certain provisions in its existingCompany Law, Act 179 in line with theprotocols in respect of best businesspractices that the country has accededto. In a pre-assessment workshop, heldin March, 2016, to ascertain Ghana's levelof compliance with the Financial ActionTask Force (FATF) recommendations, itemerged that there is a lacuna in theexisting Legislation in relation to thesubmission of details by shareholders ofcompanies on the beneficial ownership ofcompanies in Ghana. It was also noted by FAFT that theinformation in companies registerpertaining to legal ownership/control doesnot include information on beneficialownership. Again, there is no mechanismin place to verify the identity or owners ofcompanies, for purposes of fighting
corruption, money laundering andfinancing terrorism. Ghana is due for the second round ofmutual evaluation, by the Inter-Governmental Action Group AgainstMoney Laundering in West Africa(GIABA) in September, 2016. Unfor-tunately, the holistic review of the lawcannot be done within the stipulated timefor the evaluation, and the country riskbeing blacklisted if its existing companylaw is not revised to ensure compliancewith FATF Recommendations. There is therefore, the urgent need toamend certain portions of the CompaniesAct, 1963 (Act 179), in line with FAFTeecommendations to avoid blacklisting, ashappened in February, 2012. Theprovisions being introduced, are to allowfor transparency in the operations ofcompanies in respect of beneficialownership arrangements. Hence theintroduction of the Bill.
Object of the Bill The Bill seeks to provide for theinclusion of the names and particulars ofbeneficial owners of companies in theregister of members, establish a centralregister and to provide for related matters.
Observation The Committee observed that, clause1 of the Bill seeks to amend section 27 ofthe Companies Act, 1963 (Act 179), torequire a subscriber of a company toprovide the details of the beneficial ownerin the register of members, in a situationwhere the subscriber is not the beneficialowner. The provision of the particulars ofactual owners of shares in the company'sregister of members, would enablebusinesses to identify who really owns
the company. Companies are required toindicate during registration, the membersand beneficial owners who are politicallyexposed in the Register of Members.
The Committee also noted theestablishment of a Central Register by theBill, which is to be kept and maintainedby the Registrar-General, both in manualand electronic forms. The Register issupposed to contain particulars requiredfor registration under sections 27, 32 and303 of Act 179, and any other informationthat the Registrar- General may require. The Central Register most importantly,must contain the nature of interestincluding the details of the legalarrangement in respect of the beneficialownership. The Registrar-General isenjoined to collaborate with competentauthorities for the purposes ofmaintaining, verifying and updating theRegister, and upon request and in timelymanner, make it available to the authoritiesfor inspection. The information in the Central Registerwould facilitate the tracking of corruptionon the part of members and beneficialowners of companies.
Conclusion Throughout the world, the issue oftransparency has become very critical inthe operations of companies. Experiencehas shown that, people hide behindcomplex and opaque business organi-sations to evade tax, engage in corruptionand transnational organised crimes.Countries are therefore being compelledby international protocols to put thenecessary transparent measures in placeto combat illicit activities perpetrated bycompanies. As afore-indicated in the Report, Ghanais due for assessment on its compliancewith the recommendations of FAFT inSeptember, this year. The country wouldbe blacklisted if it fails in the evaluation. Judging from the exigencies of theHouse therefore, the Committeerecommends to the House to adopt itsReport and pass the Bill under certificateof urgency, in accordance with article106 (13) of the Constitution, and Order119 of the Standing Orders of the House,subject to the amendments proposed inthe attachment. Respectfully submitted.