CAC ACCUSES BANKS OF FACILITATING CORRUPTION THROUGH INACTIVE COMPANY ACCOUNTS

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By: Balogun Ibrahim

The Registrar-General of the Corporate Affairs Commission, Hussaini Magaji (SAN), has accused some banks and financial institutions of weakening Nigeria’s anti-corruption and compliance framework by allowing inactive and non-compliant companies to continue operating and carrying out transactions.

Magaji also revealed that the Commission had reported 248 fake company registrations to the Economic and Financial Crimes Commission for investigation and possible prosecution, while three CAC staff members were referred to the Independent Corrupt Practices and Other Related Offences Commission over alleged internal misconduct.

He made the disclosures on Tuesday in Abuja during an Anti-Corruption Day presentation and panel discussion organised as part of activities marking the Commission’s 35th anniversary. Magaji delivered a paper titled “Transparency for Development: The Nigeria Experience.”

Addressing representatives of key anti-corruption and law enforcement agencies, the CAC registrar-general warned that Nigeria’s corporate regulatory system would remain exposed unless all institutions applied compliance rules uniformly.

Magaji stated that the CAC now considers only companies that have fully disclosed their Persons with Significant Control (PSC) as compliant, explaining that those that fail to meet the requirement are classified as inactive and regarded as unfit for legitimate transactions.

He raised concern that this regulatory measure is frequently ignored by some financial institutions.

According to him, despite being designated inactive by the CAC, certain financial institutions—particularly banks—still permit such companies to operate, open accounts, and carry out transactions, a situation he described as a significant weakness in the national compliance framework that requires collective action to resolve.

He said Nigeria’s regulatory framework must operate with a unified approach, stressing that non-compliant companies should not be allowed to enjoy the benefits of legality.

“If a company is non-compliant, it should not enjoy the privileges of legality. Our collective success depends on enforcing this principle across the board,” he said.

Magaji added that the Commission had taken firm steps to strengthen compliance by sanitising its internal processes and demonstrating zero tolerance for corruption.

He disclosed that during the period under review, three members of staff were handed over to the ICPC over alleged misconduct involving suspicious and unauthorised alteration of company records, a move he said was aimed at preventing compromise and reinforcing institutional integrity.

The CAC registrar-general also revealed that 248 fake company registrations were discovered to have been illegally inserted into the Commission’s system and were reported to the EFCC for investigation and prosecution.

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According to him, the entities operated without verifiable corporate identities and failed to contribute to national revenue through taxation, adding that an additional 15 such entities had also been submitted for further investigation.

He noted that, despite the actions taken, no legitimate legal challenge had been instituted against the CAC over the removal and reporting of the незакон registrations.

The CAC Registrar-General also renewed his call for the creation of a single, harmonised national register for beneficial ownership information, warning that Nigeria’s fragmented system creates loopholes that can be exploited for corruption, money laundering, and illicit financial flows.

He said that although Nigeria has recorded progress in beneficial ownership transparency, several sector-specific registers still operate outside the central CAC database.

“At present, we run a fragmented system in which some sectors maintain separate beneficial ownership registers—such as those in the extractive industry and NEPZA—outside the national register managed by the CAC. This leads to duplication, inconsistencies, and regulatory gaps, weakens our national integrity framework, and complicates law enforcement efforts,” he said.

Magaji stressed that the CAC is legally and structurally equipped to function as the country’s central repository for beneficial ownership information.

He therefore called for the urgent establishment of a single, harmonised national beneficial ownership register, urging stakeholders to support the reform. According to him, such a system would enhance verification, improve transparency, and strengthen Nigeria’s compliance with global anti-money laundering and counter-terrorism financing standards.

Magaji further described beneficial ownership disclosure as an increasingly important global requirement, referencing recent international developments, including court cases in the United Kingdom involving property ownership linked to Nigerians.

He noted that beneficial ownership transparency has become a central issue in global governance, stressing that Nigeria must keep pace with the global shift toward openness and accountability.

The CAC registrar-general called for the elevation of the Persons with Significant Control Rules into an Act of the National Assembly to provide a stronger legal basis for enforcement, arguing that a more robust framework is needed to curb sophisticated abuses of corporate structures.

He also expressed concern over the practice by some large corporations of listing other companies, rather than individuals, as beneficial owners, warning that such arrangements undermine accountability and defeat the purpose of beneficial ownership transparency.

Magaji concluded by calling for sustained collaboration among Nigeria’s anti-corruption and law enforcement agencies, emphasising that tackling corruption is a shared national responsibility.

He said the fight against corruption should not be left to a single agency, describing it as a national responsibility that demands coordination, trust, and shared commitment.

Magaji urged agencies such as the EFCC, ICPC, Nigeria Financial Intelligence Unit, and the National Drug Law Enforcement Agency to strengthen information sharing, joint investigations, and real-time verification in collaboration with the CAC.

He stressed that such cooperation must go beyond isolated engagements, calling for a sustained, structured, and institutionalised approach to ensure collective efforts produce tangible results for the country.

The panel discussion was held as part of activities marking the Commission’s 35th anniversary.