CAC Intensifies Anti-Corruption Drive, Reports 248 Fake Registrations to EFCC
The Corporate Affairs Commission (CAC) has taken a firm stance against corporate malfeasance by reporting 248 fake company registrations to the Economic and Financial Crimes Commission (EFCC) for thorough investigation and potential prosecution. This significant move underscores the commission's commitment to purging Nigeria's corporate landscape of fraudulent entities that undermine economic integrity.
Banks Accused of Facilitating Non-Compliant Operations
During a panel discussion in Abuja marking the commission's 35th anniversary, Registrar-General Hussaini Magaji (SAN) leveled serious allegations against certain banks and financial institutions. He asserted that these institutions are weakening Nigeria's anti-corruption framework by permitting inactive and non-compliant companies to maintain operational status and conduct transactions.
Magaji emphasized that companies failing to disclose their Persons with Significant Control (PSC) are flagged as inactive by the CAC and are not recognized as compliant. "At CAC today, no company without full disclosure of its Persons with Significant Control is recognized as compliant. Companies that fail to disclose their PSC are flagged as inactive, and such status renders them unfit for credible transactions," he stated.
Despite these clear designations, Magaji expressed deep concern that some financial institutions continue to allow such flagged companies to open bank accounts and engage in financial activities. This practice, he warned, creates regulatory loopholes and compromises the nation's anti-corruption efforts.
Internal Accountability and Regulatory Actions
In a demonstration of its zero-tolerance policy towards corruption, the CAC handed over three staff members to the Independent Corrupt Practices and Other Related Offences Commission (ICPC) over allegations of misconduct involving unauthorized tampering with company records. This action aims to strengthen internal integrity and set a precedent for accountability within the commission.
Beyond the 248 fake registrations reported to the EFCC, an additional 15 entities were submitted for further investigation. Magaji highlighted that these entities lacked traceable corporate identities and contributed nothing to government revenue through taxation, emphasizing their detrimental impact on the economy.
Call for Unified Beneficial Ownership Register
The Registrar-General renewed his advocacy for the establishment of a single, harmonized national register for beneficial ownership information. He criticized Nigeria's current fragmented system, where sectors like the Extractive Industry and the Nigeria Export Processing Zones Authority (NEPZA) maintain separate registers outside the central CAC database.
"This situation creates duplication, inconsistencies, and regulatory loopholes. It weakens our national integrity framework and complicates law enforcement efforts," Magaji explained. He argued that the CAC is legally positioned to serve as the central repository for such data, urging stakeholders to support reforms that would consolidate registers, enhance verification processes, and improve transparency.
Strengthening Legal Frameworks and Enforcement
Magaji called for the Persons with Significant Control Rules to be elevated into an Act of the National Assembly, providing a stronger legal foundation for enforcement. He also raised concerns about large corporations declaring other companies as beneficial owners instead of individuals, describing this practice as a loophole that undermines accountability.
Concluding his remarks, the CAC boss urged sustained collaboration among anti-corruption and law enforcement agencies, including the EFCC, ICPC, Nigeria Financial Intelligence Unit, and the National Drug Law Enforcement Agency. This collaborative approach is deemed essential for effectively combating corporate fraud and enhancing Nigeria's compliance with global anti-money laundering and counter-terrorism financing standards.
Background on CAC's Regulatory Cleanup
This latest development follows the CAC's earlier initiative to delist over 400,000 inactive and non-compliant companies from its register, aimed at protecting the integrity of Nigeria's corporate records. The commission's transition to a fully digital registration system has facilitated remote business registration, improving the ease of doing business while enabling more robust monitoring and compliance enforcement.
