Under the Persons with Significant Control (PSC) Regime which came into effect on 6 April 2016, certain classes of entity were exempt from the need to maintain a PSC register as they already met the requirements primarily through what is known as being a DTR5 entity – which means that they fall within the scope of Chapter 5 of the FCA’s Disclosure and Transparency Rules which requires companies who are listed on the Main Market (here in the UK) or an equivalent EEA market or on specified markets in the USA, Switzerland, Japan or Israel to meet transparency rules equivalent to or greater than the PSC requirements.
Now you’d think that was quite a restrictive rule and relatively few quoted entities would be able to take advantage of it.
You’d think.
With the help of the lovely people at Global Witness (and Sam Leon in particular, who produced a spreadsheet of all those entities who currently claim this exemption) I thought I’d have a little trawl through to see how it’s working. Well!
First up is Barry Capital Ltd (usual caveats apply by the way. No suggestion of wrongdoing or criminal activity – just a variance from the expectations under the rules).
They were incorporated recently (15/01/2018) and initially gave their address as 160 Kemp House, City Road, London EC1V 2NX (a common address as it is home to a company formation agency). However, on 4th September 2018 it changed its registered address to:
30/212 Moo.1 Wadlao Thakam, Bangkok, Bangkok
Which is interesting as, according to the UK Government website it is a requirement for limited companies to maintain a registered address in the UK.
It also named a PSC:
Miss Witchuta Watjanarat
Fair enough but then on 20 October Barry Capital Limited claimed exemption from maintaining a PSC register as it has voting shares admitted to trading on a market listed in the Register of People with Significant Control Regulations 2016 (i.e. one of the above global stock markets). Which is not bad going for a company which is less than a year old. But there’s a snag. I can’t find any trace of a listing anywhere.
I did find a website: https://barrycapital.co.uk/ but literally all it has is its former registered address. No phone number, no other details, nothing.
Now call me daft, but I’m going to suggest that Barry Capital Limited is not listed anywhere. Not least because, as a private limited company, it can’t be directly listed anywhere. The best it could be is the subsidiary of a PLC or equivalent which is capable of being listed.
And on checking its filings, I see that the sole declared shareholder is Ms Watjanarat so that doesn’t seem likely, or indeed, possible.
And that’s an issue for any Limited Company which claims exemption from the PSC register. I’m not sure it can. I think it can name a parent PLC as its PSC and the parent PLC can then claim exemption (provided it is listed on an approved exchange). But a Ltd Co can’t.
I’m sorry Gary Hough Ltd (Gary is a lorry driver and his company is showing as dormant)
And I’m sorry BJ Drinks Ltd (a cash and carry in Coventry)
And I’m also sorry Blooms de Chelsea Ltd (florists, with your statement of incorporation showing your ONE share)
None of you and a whole bunch more besides are really listed on a regulated market within the terms of the Regulations. And therefore you can’t claim exemption from maintaining a PSC register.
Does that mean there is something more sinister going on?
Actually, no I don’t think so. I suspect this is just a bunch of people who don’t care for filling in too many forms and just ticked a box hoping the problem would go away.
And guess what?
It did!
Because, apparently, Companies House doesn’t do the most basic of checks even when a company claims to be listed.
I thought long and hard about publishing this article in case it gave other people the same idea but I will be monitoring the situation on a regular basis, so I’ll soon spot if other firms try jumping on the bandwagon.
And there is another seldom used but interesting exemption I will be looking at next, so keep watching!
Hiding in plain sight - my search for money launderers 