The Czech government has proposed clamping down on anonymous ownership of companies through the controversial use of “bearer shares”; if signed into law, the draft proposal agreed by the cabinet on Wednesday would require the beneficial owners of firms to register them with the stock exchange or financial offices.
According to a report by the ČEKIA information agency, as of the end of 2011, the true ownership of more than half of all joint stock companies in the Czech Republic — or roughly 13,000 firms — was masked through bearer stock.
Justice Minister Jiří Pospíšil (Civic Democrats, ODS) was behind the effort to draft a bill to regulate bearer stock certificates, spurred on in large part by Public Affairs (VV), a junior member in the center-right coalition government of Prime Minister Petr Nečas (ODS) until April, when the upstart party split.
The deputy PM charged with the government’s anti-corruption drive, Karolína Peake, who heads the new LIDEM party that resulted from VV’s split, worked closely with Pospíšil on drafting the legislation and related measures agreed by the Cabinet on Wednesday.
Chief among them is a proposal to allow for plea bargaining in corporate criminal cases; those cooperating fully with state prosecutors would be granted immunity from prosecution, a practice common in the United States, for example.
“The means for uncovering corruption are very limited. We should, therefore, not deprive ourselves of legal tools but on the contrary create them,” Peake said, as cited by the news server iDNES.cz, pointing out such a measure’s potential usefulness, for example, in bribery cases.
She further noted that while cancelling anonymous shares was an important step, the ministries of justice and regional development were also drafting legislation to require greater transparency in the ownership of companies bidding for public tenders.
