Kenya central bank to compel banks to disclose shareholders

Nairobi – The Central Bank of Kenya is seeking powers to compel holding companies of banks to disclose the identity of their true owners, including nominees.
Kenya Central Bank governor Njuguna Ndung’u. Net photo
Kenya Central Bank governor Njuguna Ndung’u. Net photo

Nairobi – The Central Bank of Kenya is seeking powers to compel holding companies of banks to disclose the identity of their true owners, including nominees.

The bank has published guidelines for bank’s non-operating holding companies that, among others, provide that the banking regulator is free to obtain ownership information from any of a bank’s shareholder.

This is for purposes of ascertaining or investigating into the control of shareholding or voting power in the approved non-operating holding company.

Such a shareholder will be required to disclose whether they hold any share in the approved non-operating holding company as beneficial owner or as nominee. If they hold the share as nominee, to indicate as far as they can, the person for whom they holds the share (either by name or by other particulars sufficient to enable that person to be identified) and the nature of his interest.

The regulations, for which the central bank is seeking public input, provide guidance on the acquisition of control of banks by non-operating holding companies. For instance, the formation of a non-operating holding company seeking to acquire more than 25 per cent of an institution’s paid up share capital must be approved by the central bank.

Also requiring central bank’s approval is the acquisition of a subsidiary bank or any action that causes a bank to become a subsidiary of a non-operating holding company.

Additionally, a non-operating holding company granted approval by the central bank shall be required to pay an approval fee of KSh1m and thereafter pay an annual fee of KSh500,000 to the bank.

According to the guidelines, all persons seeking to become significant shareholders and senior officers of any non-operating holding company must complete the requisite fit and proper forms and be vetted as suitable persons by the central bank.

The guidelines prohibit a holding company from granting any credit facility except to any company within its non-operating holding companies group. Further, directors of such a holding company are discouraged from engaging in activities that can result in a conflict of interest.

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