Protect your investments

Anonymously-owned companies can expose investors to the risk of fraud, corruption, and significant financial losses. Investors need to know who they are dealing with in order to make responsible investment decisions. Requiring the disclosure of beneficial ownership information is one way investors can safeguard against fraud and corrupt behavior and all the risks that come with doing business in an uncertain business environment.

Alleged fraud and bribery facilitated by anonymously-owned companies have posed serious financial risks for investors and associated businesses in multiple cases. In 2012, the Swedish telecommunications company, TeliaSoneria AB, came under investigation for paying a $250 million bribe to the daughter of the President of Uzbekistan in exchange for an Uzbek network license.  Following  an independent investigation, TeliaSonera admitted a failure to conduct sufficient due diligence. The scandal resulted in five senior TeliaSonera officials stepping down and a 19% decrease in the company’s share price over two years. TeliaSoneria’s problems worsened when a research firm issued a report in October 2015 that found that the resulting fines may affect TeliaSonera’s ability to pay dividends, further depressing the company’s stock, and slashing $900 million from its overall value. In September 2016, U.S. and Dutch authorities asked TeliaSonera to pay $1.4 Billion to settle allegations surrounding the bribe.

Increased public disclosure of the ultimate owners of companies will evoke greater investor confidence in those they do business with. This means that more publicly accessible beneficial ownership information would help investors mitigate uncertainties when making investment decisions. It would also empower the business community, including investors to more accurately identify and manage their exposure to all types of risks related to anonymous companies and to avoid the consequences stemming from these risky business deals.

Show your support as an investor to governments to make beneficial ownership information public for all to see in order to level the playing field.

Make the commitment and learn more about how to factor the steps companies are taking to address their exposure to anonymously-owned companies into your investment decisions.

Investors should assess the steps taken by companies to manage risk by publicly disclosing their ultimate beneficial owners and uncovering the beneficial owners among their business partners and supply chains. To further safeguard against risks associated with anonymously-owned companies, investors should directly engage companies in their investment portfolio about approaches to identifying and mitigating risk related to the lack of corporate ownership transparency

Case Studies

Investor support for beneficial ownership transparency

In September 2016, institutional investors managing more than $740 billion in assets wrote to U.S. Congress members to urge the introduction of legislation on beneficial ownership transparency. Some of the top investors taking this stand included Boston Common Asset Management, CtW Investment Group, and Hermes Equity Ownership Services

Join the movement for ownership transparency as an investor. Find out more about voicing your support for public beneficial ownership information public to governments in order to level the playing field and how to factor ownership transparency into your investment decisions.

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