CAC points out banks for aiding corruption by hosting inactive company accounts
Elegbede Abiodun
… 248 fake company registrations were discovered to have been illegally inserted into the CAC system.
The Registrar-General of the Corporate Affairs Commission, Hussaini Magaji (SAN), has accused some banks and financial institutions of undermining Nigeria’s anti-corruption and compliance framework by allowing inactive and non-compliant companies to continue operating and transacting freely.
Magaji also disclosed that the Commission reported 248 fake company registrations to the Economic and Financial Crimes Commission for investigation and prosecution, while three CAC staff members were handed over to the Independent Corrupt Practices and Other Related Offences Commission over alleged internal misconduct.
The CAC boss made the disclosures on Tuesday in Abuja during an Anti-Corruption Day presentation and panel discussion, held as part of activities marking the Commission’s 35th anniversary. He spoke on the topic, “Transparency for Development: The Nigeria Experience.”
Speaking before representatives of key anti-corruption and law enforcement agencies, Magaji warned that Nigeria’s corporate regulatory system would remain vulnerable unless all institutions enforced compliance uniformly.
“Let me state clearly: at CAC today, no company without full disclosure of its Persons with Significant Control (PSC) is recognised as compliant. Companies that fail to disclose their PSC are flagged as inactive, and such status renders them unfit for credible transactions,” he said.
He expressed concern that this regulatory sanction was being routinely ignored by some financial institutions.
“However, we face a serious challenge. While CAC may flag such companies as inactive, some financial institutions, particularly banks, continue to allow these inactive companies to operate, open accounts, and transact freely. This is a major weakness in our national compliance chain. We must join hands to stop it,” Magaji added.
According to him, Nigeria’s regulatory ecosystem must speak with one voice, stressing that non-compliant companies should not enjoy the privileges of legality.
“If a company is non-compliant, it must not enjoy the privileges of legality. Our collective success depends on enforcing this principle across the board,” he said.
To deepen compliance, Magaji said the Commission had taken decisive steps to clean up its internal processes and demonstrate zero tolerance for corruption.
“In the year under review, I had cause to surrender three members of staff to the ICPC for alleged misconduct involving suspicious and unauthorised tampering with company records. This was done to eliminate the chances of compromise and strengthen integrity within our processes.”
He further revealed that 248 fake company registrations were discovered to have been illegally inserted into the CAC system and reported to the EFCC.
“Within the same period, I submitted to the EFCC a list of 248 fake company registrations illegally inserted into our system through unlawful means, for investigation and prosecution,” Magaji disclosed.
According to him, the entities operated without traceable corporate identities and failed to contribute to national revenue through taxation. An additional 15 such entities were also submitted for further investigation.
“Notably, despite these actions, no legitimate legal challenge has been brought against CAC regarding the removal and reporting of these illegal registrations,” he said.
The CAC Registrar-General also renewed calls for the establishment of a single, harmonised national register for beneficial ownership information, warning that Nigeria’s current fragmented system created loopholes that could be exploited for corruption, money laundering, and illicit financial flows.
He noted that while Nigeria had made progress in beneficial ownership transparency, multiple sector-specific registers operated outside the central CAC database.
“At the moment, we operate a fragmented system where certain sectors maintain separate beneficial ownership registers, such as the Extractive Industry and NEPZA, outside the central national register managed by CAC. This situation creates duplication, inconsistencies, and regulatory loopholes. It weakens our national integrity framework and complicates law enforcement efforts,” he said.
He stressed that CAC was legally and structurally positioned to serve as the central repository for beneficial ownership data in the country.
“There is therefore an urgent need for a single, harmonised national register for beneficial ownership in Nigeria. CAC is positioned by law and structure to serve as the central repository for beneficial ownership information. We need your support, your voice, your advocacy, and your institutional backing to push for this reform in the national interest,” he pleaded with stakeholders.
According to him, a single register would improve verification, enhance transparency, and strengthen Nigeria’s compliance with global anti-money laundering and counter-terrorism financing standards.
Magaji further described beneficial ownership disclosure as a growing global imperative, citing recent international developments, including court decisions in the United Kingdom involving property ownership linked to Nigerians.
“Beneficial ownership disclosure has become one of the most topical and critical issues in global governance today. The world is moving rapidly towards transparency, and Nigeria cannot afford to lag behind,” he said.
He called for the elevation of the Persons with Significant Control Rules into an Act of the National Assembly to provide a stronger legal foundation for enforcement.
“We must now push strongly for the passage of the Persons with Significant Control Rules into an Act of the National Assembly. We need a stronger, more comprehensive legal framework that will checkmate sophisticated abuses of the corporate vehicle,” he added.
The CAC boss also raised concern over the practice by some large corporations of declaring other companies, rather than individuals, as beneficial owners.
“This defeats the purpose of beneficial ownership transparency. It creates layers of concealment and undermines accountability,” he warned.
Magaji concluded by urging sustained collaboration among Nigeria’s anti-corruption and law enforcement agencies, describing the fight against corruption as a collective national responsibility.
“The fight against corruption is not the responsibility of one agency. It is a national duty requiring coordination, trust, and shared resolve,” he said.
He called on agencies including the EFCC, ICPC, Nigeria Financial Intelligence Unit, and the National Drug Law Enforcement Agency to deepen information sharing, joint investigations, and real-time verification with the CAC.
“Our collaboration must not be episodic. It must be sustained, structured, and institutionalised so that our collective efforts translate into measurable outcomes for Nigeria,” he added.
The panel session was held as part of the commission’s 35th-year anniversary celebration.
