Health Secretary Jeremy Hunt, a person with significant control over the NHS, has been referred to the parliamentary standards commissioner after he delayed declaring a significant interest he holds in a property company.
Hunt’s property company
Under the PSC regime anyone with more than a 25% interest in a company will be classed as ‘a person with significant control’ and must declare this interest to Companies House within 28 days. However this period is shorter under House of Commons rules – at only 15 days, Jeremy Hunt failed to register his interest for five months, a delay which has been called ‘simply unacceptable’. Failure to declare an interest to Companies House is a criminal offence and the consequences can be serious for any individual seen to be flouting the rules.
The company in question, Mare Pond Properties, was set up by Mr Hunt, alongside his wife, in 2017 with the intention of buying seven luxury flats in Southampton. Mr Hunt holds a 50% stake in the company and despite informing the Cabinet Office of his involvement with the company after it was set up, he should have registered his interest at Companies House.
On top of Mr Hunt’s failure to declare the interest with Companies House, he also failed to disclose his interest in the company on the parliamentary register of members’ interests within the required 28 days.
Mr Hunt has blamed ‘honest administrative mistakes’ for the oversight and claims he did not benefit financially from the failure to register.
What does the PSC regime require?
A company can no longer use the annual filing of the confirmation statement to inform Companies House of changes to its PSC information. Instead, any changes must be reported within 28 days of them becoming apparent. This gives the company 14 days to update its register and a further 14 days to file the relevant forms at Companies House.
The Government introduced the new PSC rules in an attempt to increase corporate transparency and protection against money laundering in the UK. Recently Companies House has stepped up its efforts to ensure compliance with the rules and is committed to chasing companies and individuals not currently compliant with the regime.
Companies House and ensuring compliance
In its business plan for the new financial year Companies House sets out its aim to respond to 95% of PSC complaints within ten days. PSC information is now more up to date following the PSC changes in June 2017 and over 98% of companies have provided PSC information.
Going forward Companies House will contact companies where they appear to have misunderstood the PSC requirements to ensure that filed information is corrected and that they comply with the legal requirements. Companies and PSCs will be pursued where notices have been issued asking PSCs to provide the required information, or where a PSC has failed to provide information, to ensure company records are accurate and up to date. Where there has been a complaint about missing or incorrect PSC information, Companies House will seek compliance from the company in question.
In order to assist with compliance, communications and guidance produced by Companies House will be reconsidered and simplified to assist effective filing.
After almost a year of the updated PSC regime, over the next few months Companies House will work with the Department for Business, Energy and Industrial Strategy to gather evidence on the regime’s effectiveness. This evidence will be used as part of a wider review in 2019.
Jeremy Hunt is an unlikely first casualty of the PSC regime and his predicament highlights the importance of complying with the rules even as a member of the very government which established the regime.
This blog post was written by Elliot Gibson. For further information, please contact:
Sophie Brookes, partner, Corporate team
T: 0161 836 7823