CAC says banks weakening Nigeria’s compliance system, uncovers 248 fake firms

The Corporate Affairs Commission (CAC) has accused some banks and financial institutions of undermining Nigeria’s anti-corruption and regulatory compliance framework by allowing inactive and non-compliant companies to continue operating and conducting financial transactions.

Hussaini Magaji, Registrar-General of the CAC, stated this on Tuesday in Abuja during an Anti-Corruption Day presentation and panel discussion held as part of activities marking the Commission’s 35th anniversary.

Magaji disclosed that the Commission had uncovered 248 fictitious company registrations that were illegally inserted into the CAC database and subsequently forwarded to the Economic and Financial Crimes Commission (EFCC) for investigation and possible prosecution.

He also revealed that three members of staff of the Commission had been handed over to the Independent Corrupt Practices and Other Related Offences Commission (ICPC) over alleged professional misconduct.

Addressing representatives of anti-corruption and law enforcement agencies, Magaji warned that Nigeria’s corporate regulatory environment would remain vulnerable to abuse if compliance rules were not enforced uniformly across institutions.

“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 despite these measures, some financial institutions continued to transact with such companies.
“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 stated.

According to him, companies that fail to meet statutory compliance requirements should not enjoy the privileges of legality, stressing that effective enforcement across regulatory bodies was critical to the success of Nigeria’s anti-corruption efforts.

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“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 added.

On internal reforms, the Registrar-General said the CAC had intensified efforts to strengthen transparency and integrity within the Commission. He disclosed that three staff members were surrendered to the ICPC following allegations of unauthorised tampering with company records.

“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,” Magaji said.

He further explained that the 248 fake companies uncovered by the Commission lacked verifiable corporate identities and did not contribute to government revenue through taxation. An additional 15 suspicious entities, he added, had also been forwarded for further investigation.

“Despite these actions, no legitimate legal challenge has been brought against the CAC regarding the removal and reporting of these illegal registrations,” he noted.

Magaji renewed his call for the establishment of a unified national register for beneficial ownership information, warning that Nigeria’s current fragmented system creates loopholes that could be exploited for corruption, money laundering and other illicit financial activities.

Musa Adamu Aliyu, At the event, the Chairman of the ICPC, represented by Demola Bakare, Director of Public Enlightenment and Education and ICPC spokesperson, underscored the link between transparency and national development.

Aliyu said transparency was no longer a fashionable governance concept but a core determinant of sustainable development, investor confidence and public trust in institutions. He described the CAC as a critical institution at the centre of Nigeria’s economic and entrepreneurial development, noting that corporate transparency ultimately strengthens national transparency.

He highlighted reforms such as the Companies and Allied Matters Act (CAMA) 2020, beneficial ownership regulations, open procurement systems, asset declaration frameworks and the Freedom of Information Act as key pillars supporting transparency and accountability in Nigeria.

According to him, while progress has been made, challenges remain in enforcement, inter-agency collaboration and resistance from vested interests, stressing that transparency laws must be matched with strong implementation and institutional culture.

“Transparency, trust, and economic growth. Empirical evidence consistently shows that transparent economies attract investments, grow stronger small and medium enterprises, generate sustainable jobs and mobilize domestic revenue more effectively. For Nigeria, transparency broadens the task base, reduces dependency on borrowing, and creates fiscal space for infrastructure, education, and healthcare,” he said