CAC accuses banks of aiding corruption by hosting inactive company accounts

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.