CAC Warns Banks Against Allowing Inactive Companies To Conduct Financial Transactions

…Submits 263 Illegal Companies To EFCC For Investigation

…Urges National Assembly To Pass Stronger Beneficial Ownership Law

…Hands Over Three Officials To ICPC For Corrupt Practices

The Corporate Affairs Commission (CAC) has submitted a total of 263 illegally registered companies to the Economic and Financial Crimes Commission (EFCC) for investigation and possible prosecution, as part of efforts to sanitise Nigeria’s corporate registry and strengthen the fight against corruption and financial crimes.

The Registrar-General and Chief Executive Officer of the CAC, Hussaini Ishaq Magaji, SAN, disclosed this during the opening ceremony of the Commission’s 35th anniversary celebration held in Abuja, which brought together key anti-corruption and law enforcement agencies.

Magaji revealed that 248 of the illegal entities were discovered to have been fraudulently inserted into the CAC system, while an additional 15 companies were later identified and forwarded to the EFCC for further investigation.

According to him, the companies were operating within the Nigerian system without traceable corporate identities and without contributing to national revenue through taxation.

“In the year under review, we submitted to the EFCC a list of 248 fake company registrations that were illegally inserted into our system through unlawful means,” Magaji said. “These were purported entities operating within Nigeria without traceable corporate identity and without contributing to national revenue.

“We also identified and submitted an additional 15 such entities for further investigation.”

He noted that the actions were part of decisive steps taken by the Commission to cleanse its internal systems and demonstrate zero tolerance for corruption, even in the face of legal challenges and personal attacks.

Magaji also disclosed that three members of staff of the Commission were handed over to the Independent Corrupt Practices and Other Related Offences Commission (ICPC) for alleged involvement in suspicious and unauthorised dealings with company records.

“These actions were taken to eliminate the chances of compromise and to strengthen integrity within our processes,” he stated, adding that the fight against corruption requires sacrifice and institutional courage.

While reaffirming CAC’s commitment to supporting anti-corruption agencies, the Registrar-General stressed that no successful prosecution of corporate and financial crimes could be achieved without effective access to accurate corporate records.

“As the custodian of corporate identity in Nigeria, we maintain records that are essential for tracing criminal proceeds, identifying beneficial owners and dismantling complex structures used to conceal corruption,” he said. “CAC remains committed to providing prompt, responsive and proactive support to all anti-corruption agencies.”

He called for sustained and institutionalised collaboration between the CAC and law enforcement bodies, warning that episodic cooperation would not deliver measurable results.

“Our collaboration must not be episodic; it must be structured, sustained and institutionalised,” Magaji said. “We must deepen information sharing, conduct joint investigations and research so that our collective efforts can translate into measurable outcomes for Nigeria.”

A major focus of his address was the urgent need to strengthen Nigeria’s beneficial ownership disclosure framework.

Magaji warned that the current system remains fragmented, with some sectors maintaining separate beneficial ownership registers outside the central national register managed by the CAC.

According to him, the situation creates regulatory inconsistencies, weakens the national integrity framework and complicates law enforcement efforts.

“There is an urgent need for a single, harmonised National Register of Beneficial Ownership in Nigeria,” he said. “By law and by structure, CAC is positioned to serve as the central repository for beneficial ownership information.”

He urged the National Assembly to urgently pass stronger and more comprehensive beneficial ownership legislation, including the Persons with Significant Control (PSC) rules, to give the framework greater legal force.

“We need a stronger, more comprehensive legal framework that will deepen compliance and check even the most sophisticated abuses at the corporate level,” Magaji stated. “This is not merely a CAC matter; it is a national reform issue.”

The CAC boss explained that under current regulations, companies that fail to fully disclose their persons with significant control are flagged as inactive and considered unfit for credible business transactions.

However, he lamented that some financial institutions, particularly banks, continue to allow such non-compliant companies to operate accounts and conduct transactions freely.

“This is a major weakness in our national compliance chain,” he warned. “If a company is not compliant, it must not enjoy the privileges of operating within the formal financial system.”

He also expressed concern over the practice by some large corporations of listing other corporate entities, rather than individuals, as beneficial owners, contrary to the intent of the law.

“This defeats the purpose of beneficial ownership disclosure,” Magaji said. “It creates layers of concealment and undermines accountability.”

Placing Nigeria’s reforms in a global context, he noted that beneficial ownership transparency has become a critical issue in international governance, citing recent developments in the United Kingdom that have again highlighted the importance of knowing the true owners of assets and companies.

“Nigeria cannot afford to lag behind in this global direction,” he said.

Magaji concluded by calling on all anti-corruption agencies, including the EFCC, ICPC and the Nigerian Financial Intelligence Unit (NFIU), to strengthen partnerships with the CAC, stressing that the fight against corruption is a shared national responsibility.

“The fight against corruption is not the duty of one agency,” he said. “It requires coordination, trust and shared results for the future of our country.”