Anomalies in Identification and Monitoring of Changes in SBO - MMJC

The requirement for disclosure of Significant Beneficial Owner (SBO) is an attempt to identify that individual who has the power to control the decisions taken in any company through the nonindividual shareholders in the company.

Money laundering is a menace for all growing economies and all countries aim to have world class mechanisms to combat this evil. One such mechanism is the requirement for identification of significant beneficial owner (“SBO”) in all companies registered in India. The mechanism for identification of ‘beneficial owner’ was already in existence under the Prevention of Money-Laundering (Maintenance of Records) Rules, 2005 (“PMLA Rules”) and it was implemented as a part of KYC check by banks. But the attempt made by the Ministry of Corporate Affairs (“MCA”) to find out SBO at each company level, has created a lot of awareness among corporates and practising professionals as it has created disclosure requirements to the MCA and continuous monitoring requirements on the part of corporates. In this article, we will try to deep dive into this concept and also see some probable challenges in the continuous monitoring of this mechanism.

The article – Anomalies in Identification and Monitoring of Changes in SBO written by Partner – Ms. Deepti Jambigi Joshi is published by the Chartered Secretary of ICSI.

The link to the article – https://www.icsi.edu/media/webmodules/CSJ/November/19.pdf