The new regulation is a significant step forward to making it hard for criminals to hide behind corporate structures.
The Financial Intelligence Centre has added new regulatory guidance in its ongoing battle against financial crime.
However, with criminals becoming sophisticated, and making use of complex webs of smaller shareholdings to obscure their control over legal entities. The new 5% threshold is expected to help with such tactics.He says the change aligns with the Companies and Intellectual Property Commission’s Beneficial Ownership Register and addresses the high levels of financial crime in South Africa.
“By looking closer at ownership structures, investigators are much more likely to identify scenarios where one person holds multiple smaller shareholdings across various entities—a common tactic used to maintain control while staying under the radar.”This is because companies have historically viewed detailed shareholder disclosures as an invasion of privacy. The new 5% threshold demands an even closer look at ownership structures, which McEwan believes may be met with some resistance.
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