Companies will be required to provide the full information on nominee arrangements to Acra. — The Straits Times
SINGAPORE: Singapore is enhancing transparency around nominee directors and shareholders through legislative changes passed on Tuesday, which require companies to provide the full information on nominee arrangements to the Accounting and Corporate Regulatory Authority (Acra).
Acra will also make public which of a company’s directors and shareholders are nominees.
A nominee director is a person who is appointed as a director of a company, but acts according to the instructions of another person or a beneficial owner.
Such individuals are required by law to disclose their particulars and nominee status to their companies, but previously there was no requirement for them or their companies to share this information with Acra.
This will change with the passing of the Companies and Limited Liability Partnerships (LLPs) (Miscellaneous Amendments) Bill in Parliament on Tuesday, as part of efforts to strengthen Singapore’s anti-money laundering regime.
The information companies must provide to the regulator includes the particulars of the nominee directors and shareholders, as well as the identities of the nominators behind these nominees.
Second Finance Minister Indranee Rajah told Parliament the information would be available only to Acra and other public agencies for the enforcement of any written law.
However, Acra will make public which of a company’s directors and shareholders are nominees.
In other words, an individual’s status as a nominee director will be made public, although the identity of the nominator will not be disclosed.
“This information will be useful to banks, corporate-service providers and other gatekeepers who may, for instance, wish to conduct additional checks on companies with many nominee directors or shareholders,” said Indranee during the debate on the Bill.
To ensure the accuracy of registers, the maximum penalties for companies and LLPs that commit offences relating to their registers will be raised to S$25,000, from S$5,000.
A person who provides false or misleading information about their registers to Acra can be fined up to S$25,000.
Companies and LLPs will be required to verify and update their controllers’ information on an annual basis.
Meanwhile, the Corporate Service Providers Bill, which was also passed on Tuesday, addresses the potential misuse of nominee directorship arrangements too.
Indranee said while nominee-directorship arrangements are a legitimate service provided by many corporate service providers to help their overseas-based clients fulfil Singapore’s requirement for an ordinarily resident director in order to set up a company in Singapore, they can be vulnerable to abuse.
“As important gatekeepers in the ecosystem, corporate-service providers cannot arrange for nominee directorships in a cavalier manner. In some cases, we have observed individuals who are clearly unfit to bear the responsibilities of being a director, but were arranged by errant corporate-service providers to act as nominee directors,” she said.
In one case, Grab driver Leonard Koh was fined S$28,000 for failing to conduct due diligence as a nominee director. He was a nominee director for more than 45 companies.
From 2019, he was paid S$100 a month for every company of which he was a nominee director until July 2020.
In another case, Xie Yong, a Singaporean director of 980 companies, was jailed after US$5mil was laundered through China-linked firms under him. — The Straits Times/ANN
