Wednesday, November 30, 2016

Beneficial ownership registers expose crime

Why do we need a public register of the beneficial ownership of companies and trusts? Just look at what the UK one has exposed so far:

On top of these data validation issues, we found a number of signs of non-compliance with the law. For example, 9,800 companies listed their beneficial owner as a foreign company. Now this is possible if the foreign company was listed on one of the stock exchanges deemed equivalent to the UK system (e.g. the US, EU and Japanese exchanges). However, we found almost 3,000 companies with tax haven addresses listed as beneficial owners. This is not allowed under the rules. We’ll be handing this list of companies over to Companies House to investigate further.


Initial findings suggest 19 senior politicians (known as politically exposed persons), 76 people from the U.S. sanctions list and 267 disqualified directors were listed as beneficial owners.

However, these matches were based on name and month and year of birth. This means that it’s hard to be certain that the matches are good ones. Any leads coming out of the new register will have to be followed up with more traditional investigative digging.

So that's 3,000 corporate and potentially 350 individual criminals right there. Plus, they can use the data to trace complicated the corporate ownership structures designed to cheat taxes and steal from the public as well.

These seem like excellent reasons to have a public register in New Zealand. So why doesn't our government implement one? Are they on our side, or the side of the criminals and tax cheats?