Beneficial Ownership

Who really owns companies, and why is it important? 

Anony and opaque company ownership structures, facilitate corruption, money laundering and tax evasion to name a few.

It is a crucial issue in the extractive sector where anonymous company ownership makes it possible for government officials to award lucrative contracts to companies that turn out to be owned by relatives, friends, or even themselves. Not only is this evidently highly corrupt, but it means that contracts are not awarded to the best companies for the best price, therefore citizens end up with a job that is not carried out as well as it could have been and for a bad price.

In 2011 the Nigerian government sold an oil block to Shell and ENI for US $1.1 billion, the money was transferred by the government to a company called Malabu Oil and Gas, which turned out to belong to former Minister of Oil Dan Etete. That money belonged to, and was needed by, Nigerian citizens; they never saw a dollar of it.

The government of the Democratic Republic of Congo sold mining concessions, at an outrageously low price, to a company secretly owned by a personal friend of the Congolese President. Global Witness has estimated that the state - and by extension citizens - lost out on at least US $1.63 billion. DRC is one of the world’s poorest countries.

Several countries implementing the Extractive Industries Transparency Initiative are doing a beneficial ownership pilot whereby they reveal the real owners of extractive companies operating in the country. In 2013 British Prime Minister David Cameron announced that the United Kingdom would create a public register of beneficial owners. 

PWYP Canada is calling for a publicly available centralized registry of the beneficial owners of all companies registered, listed, and operating in Canada, both provincially and federally.

 

 

FaLang translation system by Faboba