KENYA Trends and Developments Contributed by: Sammy Ndolo, Brian Muchiri and Damaris Muia, Kieti Law LLP
Enhanced enforcement and compliance mechanisms The Registrar of Companies has intensified com - pliance audits and imposed penalties for non- disclosure of beneficial ownership information. The threshold for beneficial ownership disclo - sure remains at 10% of issued shares or vot - ing rights, but recent amendments have closed loopholes by requiring the disclosure of nominee shareholders and partners. The Banking Act has been amended to include beneficial ownership in defining “significant shareholders.” This change means that the CBK must vet individuals identified as beneficial own - ers before they can be appointed as significant shareholders in banking institutions. The require - ment is intended to ensure that only individuals with clean records and no connections to illicit activities are involved in the ownership and man - agement of banks. International Alignment and Cross-Border Cooperation Kenya’s efforts to strengthen its AML and ben - eficial ownership regimes are aligned with inter - national standards, including those set by the Financial Action Task Force (FATF). The country has also enhanced cross-border cooperation with other jurisdictions to combat money laun - dering and terrorist financing, recognising the global nature of these threats. These measures have improved Kenya’s reputation as a safe and transparent destination for investment and busi - ness. Formalisation of the Role of Company Secretaries and Contact Persons Regulatory changes and the expanding role of company secretaries The role of company secretaries has become increasingly important in the Kenyan corpo -
rate governance landscape. Traditionally, the appointment of company secretaries was not mandatory for all companies. However, recent regulatory changes have made it more common for companies, particularly private companies and companies limited by guarantee, to appoint company secretaries or contact persons. Private companies or companies limited by guar - antee that lack a company secretary or resident director must appoint a contact person. The Companies Act mandates this role and requires the contact person to maintain critical company records, including those related to directorships, shareholding, beneficial ownership, and any other information required by law. Notably, the contact person must be a natural person with a permanent Kenyan residence. Enhancing Local Accountability and Regulatory Oversight The formalisation of the role of company sec - retaries and contact persons is intended to enhance local accountability and facilitate regulatory oversight. By ensuring a designated individual is responsible for maintaining statu - tory records and compliance with legal require - ments, regulators can more effectively monitor and enforce corporate governance standards. This development is particularly significant for private companies and companies limited by guarantee, which may not have previously been subject to the same level of scrutiny as public companies. Professionalisation and capacity building The evolving role of company secretaries has also led to increased professionalisation and capacity building within the profession. Com - pany secretaries are now expected to possess a deep understanding of corporate governance
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