TI-M: Restricting access to company owner data undermines reform

Summary

• TI-M expresses concern over newly enforced restrictions that limit public access to the identities of the ultimate company owners through a regulation that was passed in January.

• Its president warns that limiting access to beneficial ownership data weakens anti-money laundering reforms and could lead to greater scrutiny from the Financial Action Task Force.

Transparency International Malaysia (TI-M) has voiced serious concern over newly enforced restrictions that limit public access to beneficial ownership information.

It warned that the move threatens the country’s progress on corporate transparency and accountability.

TI-M president Raymon Ram said that while the Companies (Amendment) Act 2024, which took effect on April 1, 2024, was a significant step forward, the Companies (Access to Register and Information Relating to Beneficial Ownership) Regulations 2025, enforced since Jan 10, have “undermined the reform’s objectives and contradict global best practices.”

Beneficial ownership refers to the individuals or entities who ultimately own or control a company, even if they are not the registered owner declared on the Companies Commission (CCM) company report.

“Restricting access to beneficial ownership data, despite no such prohibition in Division 8A of the Companies Act, the CCM Act 2001, or the Capital Markets and Services Act 2007, runs counter to these principles,” Raymon said in a statement today.

He urged the government to protect public trust in transparency reforms by reviewing access restrictions under the 2025 regulations and creating secure online platforms for beneficial ownership data.

He also called for stronger civil society involvement and the passing of a robust Freedom of Information Act.

“Restrictive measures, such as the current limitations on beneficial ownership data risks rendering flagship reforms hollow.

“A truly transparent beneficial ownership regime, aligned with international norms and open access principles, will not only fortify Malaysia’s anti-corruption agenda, but also pave the way for a fairer, safer, and more prosperous Malaysia for all,” Raymon explained.

Avoid another 1MDB scandal

Raymon, a financial forensic expert, had also raised concerns last month after the US Treasury Department rolled back beneficial ownership reporting requirements for American citizens and domestic companies - a decision that has sparked global alarm over the potential rise in financial crime.

The US Financial Crimes Enforcement Network (Fincen) issued an interim rule that limits the Corporate Transparency Act (CTA) to only cover “foreign reporting companies,” requiring only these entities to report their beneficial owners.

Drawing parallels to the 1MDB scandal, Raymon warned that the rollback of the CTA enforcement in the US undermined global anti-money laundering efforts and could once again enable criminals to exploit American shell companies.

The 1MDB scandal exposed how shell companies were used to hide illicit funds.

The CTA, implemented in 2021 could have helped, but it came too late. Had it existed earlier, it might have assisted in the probe and sped up the investigation.

“If the CTA had been in place, US shell companies tied to 1MDB would’ve had to reveal their real owners, stopping them from being used to secretly move illicit funds,” Raymon said.

Complicated application

TI-M urged the government to take proactive steps by making beneficial ownership information publicly accessible.

This is as global weaknesses in anti-money laundering efforts could lead the Financial Action Task Force (FATF) to scrutinise Malaysia more closely, Raymon said.

Maintaining the current standing with FATF, an international anti-money laundering watchdog, was crucial to avoid being placed on any watchlist, which would affect Malaysia’s ability to trade with international partners, attract foreign investment, and maintain confidence in its financial system.

Under the regulations, only a limited group - such as the beneficial owners themselves, authorised individuals, Bank Negara Malaysia, select enforcement agencies, the Finance Ministry, and certain reporting institutions - are allowed to access that data.

“Additionally, all applications for access must be made in person at the CCM counter, accompanied by a written authorisation on institutional letterhead.

“This means you will need either authorisation from the beneficial owner itself or with an authorisation letter on the company’s letterhead.

“(This process) may impede the ability of stakeholders, such as journalists, researchers, and civil society organisations, to obtain necessary information for oversight and accountability purposes,” he added.

Transparency should not be symbolic

TI-M emphasised that genuine transparency must be meaningful and accessible instead of symbolic and obstructed.

“Civil society organisations play a pivotal role in scrutinising business and political interests.

“The government must facilitate, not hinder access to information,” he stressed.

Raymon reminded the government that these steps were essential to fulfilling the vision set in the National Anti-Corruption Strategy, which aims for Malaysia to be among the top 27 countries in the Corruption Perceptions Index (CPI) by 2028.

“Every CPI point gained will depend on trust earned through real accountability, not selective disclosure,” he added.

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