Tuesday, February 02, 2021

Whom do you know and how do you know them?

On 27 January 2021, the Business Registration Service notified its stakeholders that it had extended the deadline for registered companies to notify the Service of companies' beneficial owners. One of my favourite interlocutors on Twitter wondered if there was a registry in Kenya that doesn't have issues. This gave me pause. The rule regarding beneficial owners of registered companies was imposed as part of the reforms designed to combat money laundering and the financing of terrorism through registered companies whose ultimate beneficial owners (and controllers) remained hidden behind very thick and intricate corporate veils.

Broadly speaking, the Government has taken several steps to combat money laundering and the financing of terrorism by digitising different kinds of registers including the register of births and deaths, the register of persons, the immigration register, the driving licence register, the land register and the tax register. The Government's efforts have been undermined by the two-tier law enforcement system that we have in this country: the great unwashed will have the book thrown at them while the high and mighty can thumb their noses at the forces of law and order (so long as they don't run afoul of the itchy-trigger-fingered political bosses).

A Senator highlighted this two-tier justice system at a political rally on the weekend of the 23rd/24th January. He has recently come under the scrutiny of the tax and anti-corruption authorities regarding some of the income he earned from professional services he rendered to the Government of Nairobi City County. He alleged, without advancing any proof, that the recent attention of the authorities in his financial affairs was because he had decided to campaign against the building bridges initiative, including the proposed constitutional amendments, in the president's backyard - the Mt Kenya region. Presumably, if he had backed the BBI process and he had engaged in financial chicanery, he would have been given a free pass.

This is, of course, a problem that prevails the world over. Kenya is not unique. In the USA, quite recently, the former president pardoned dozens of scofflaws who had backed his unfounded (so far, wink wink) allegations about elections fraud. They had committed serious crimes. Some had even been imprisoned for their crimes. But because they backed the former president's play, they pardoned and allowed to go scot-free. In Kenya, quite frequently, those who have the president's favour never even get to be accused, charged, arraigned, tried, convicted or sentenced. One way that they get around the pesky rules and regulations of the Government is by subverting Government processes and procedures, including the process and procedures governing public registers.

We can all recall the "scandal" regarding the voter registration of the daughter of one of the former Ministers of Education. She was hard-pressed to explain how (a) she had been registered when she was out of the country and (b) how she had been registered in the same register book as President Mwai Kibaki which had (presumably) been closed after he had been issued with his voter's card. Who can forget the big-toothed spectre of the pomaded deep-voiced TV and radio presenter who was issued with a "digital" driving license without the bother of applying for it only so that the transport authorities could influence the uptake of the new document by Kenya's reckless motorists. We are painfully aware of the abortive attempts to issue Kenyans with a Huduma Namba or a "digital" passport, whose deadlines have been pushed back more than once.

But nothing reveals the two-tier system than the way the Covid-19 rules and regulations are enforced. Public health officials have extolled the virtues of wearing masks, social distancing and hand sanitisation for at least a year. Many Kenyans have been assaulted by police authorities all in the name of enforcing the rules. At least three have been killed by police on allegations that they were violating the rules. Yet those who support the BBI process have been given great leeway when violating the rules: they have held super spreader political rallies where masks or hand-washing stations have been conspicuously absent. Those who do not support the process and have attempted to hold their own anti-BBI super spreader political rallies have been arrested, jailed, and charged in court.

The chickens of our two-tier legal system are coming home to roost. In order to create the impression that its stakeholders have faced great hardship with making the necessary filings, the companies' registration authorities have extended the deadline for the filings. It is almost certain that even though the business registration process has been digitised, the traditional Big Man syndrome afflicting old analogue registers has afflicted the business name register as well, and it is becoming apparent that certain Big Men have no intention of revealing whether or not they are beneficial owners of companies that they have used to thumb their noses at a myriad of laws, rules and regulations. In the patois of The West Wing, a liberal fantasy of a functional and functioning US federal government, six to five and pick 'em, but this deadline will be extended a second time - or, as we are won't to do, the beneficial owners' rule shall not be enforced with any sort of seriousness when it comes to those Who Know People.

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