By LANRE OGUNDIPE
There is a vast difference between administrative activity and genuine enforcement intensity.
That distinction matters as Nigeria strengthens its corporate transparency and beneficial ownership regime.
Cleaning the corporate register, removing dormant entities and compelling companies to regularise their records are necessary regulatory exercises. But they do not, by themselves, establish that the structures behind corporate fraud, concealed ownership and illicit financial flows have been dismantled.
A company can disappear from the register while the person who used it remains untouched. A corporate name can be struck off while the money that passed through it remains untraced. A shell can be removed without establishing who created it, who controlled it, who operated its accounts, who directed its transactions and who ultimately benefited.
That is where the real test begins.
Nigeria already has much of the necessary infrastructure. The Corporate Affairs Commission’s Beneficial Ownership Register identifies Persons with Significant Control and is designed to capture ownership and control beyond the name appearing on a share certificate. Its stated purpose includes helping to prevent the use of shell companies for money laundering and public procurement inflation. The register is also designed for machine readable data exchange with other systems.
The Nigerian Financial Intelligence Unit, for its part, receives and analyses suspicious and threshold transaction information, draws on relevant databases and disseminates intelligence to competent authorities for investigation and prosecution.
The machinery therefore exists.
The issue is whether it is being used to move from corporate records to actual enforcement.
The first question is simple: who is actually being hit?
There is little evidence of enforcement intensity in merely removing large numbers of abandoned or inactive companies. That is essentially a database exercise.
The harder test is whether the system is reaching the corporate vehicles that matter: companies handling substantial public contracts, entities with unexplained ownership structures, networks of apparently unrelated companies sharing directors or intermediaries, and structures in which the declared owner appears different from the person exercising actual control.
This requires risk based intelligence rather than indiscriminate enforcement.
The PSC database should be systematically examined alongside relevant procurement, tax, regulatory, identity and financial intelligence, subject to the law governing access and use of such information.
A serious intelligence system should be capable of flagging patterns such as a company with a modest apparent economic profile receiving unusually large government contracts, a senior managing official or shareholder appearing repeatedly across numerous companies, several entities sharing addresses or contact details, proxy relationships, or substantial financial activity involving companies that otherwise appear dormant or newly established.
None of these indicators proves wrongdoing.
They are leads.
The job of enforcement is to determine whether the lead conceals something more.
That is where the exercise should move from automated detection to human investigation.
The second question is: where are the prosecutions?
A regulatory flag cannot be the end of the process.
Where investigation establishes deliberate concealment of beneficial ownership, fraudulent corporate information or other conduct constituting an offence, the information should move through the appropriate investigative and prosecuting channels.
The trail should answer basic questions.
Who made the declaration?
Who supplied the information?
Who exercised control?
Who gave the instructions?
Who operated the account?
Who benefited?
Who knowingly facilitated the arrangement?
The answers should come from evidence.
That evidence will often lie outside the corporate register itself. Bank mandates, payment instructions, procurement documents, contracts, powers of attorney, accounting records, electronic communications and the history of changes in ownership and directorship may reveal the person exercising effective control.
This is why targeted forensic investigation must follow credible intelligence.
Where the evidence and applicable legal thresholds justify it, investigators should be able to preserve and examine digital records, corporate files, financial documents and communications. Search and seizure should, of course, be conducted under the appropriate legal authority.
Professional intermediaries should also be examined where evidence points to knowing participation in a scheme. Incorporating a company or providing professional services is not evidence of criminality. But where a professional repeatedly facilitates arrangements designed to conceal ownership or move illicit proceeds, the evidence should determine whether further investigation is warranted.
The third question is more consequential: are the accounts, assets and operations actually being disrupted where the law permits it?
Delisting is not a bank freeze.
A CAC action does not, by itself, authorise the indiscriminate freezing of accounts. Financial restraint must follow the applicable law, evidential thresholds and, where required, judicial process.
But the opposite extreme is equally unacceptable.
Where financial intelligence and investigation establish grounds for action, the system should move quickly to preserve relevant evidence and prevent the dissipation of suspected proceeds.
The Proceeds of Crime Recovery and Management Act provides a court based mechanism for restraint of realisable property where its statutory conditions are satisfied. The law also permits restraint in appropriate circumstances of property under the effective control of the relevant person, even where the identity of another person holding that property is not yet known.
That is precisely where financial intelligence must connect with enforcement.
The corporate structure identifies the entity.
The financial intelligence identifies the movement.
The investigation identifies the controller.
The law determines what can then be restrained, prosecuted or recovered.
The process should also reach beyond individual companies.
One person may sit behind multiple entities. One address may connect apparently unrelated companies. One intermediary may appear repeatedly across a network. One procurement relationship may expose corporate connections that cannot be seen by examining companies separately.
The target, therefore, should not always be the company.
It should be the network revealed by the evidence.
That leads to the fourth and most important stage: find the natural person exercising effective control.
The sophisticated corporate operator may not appear as the majority shareholder. Control may be exercised through nominees, relatives, associates, employees, financing arrangements, board appointment powers, bank mandates, contractual authority or other forms of significant influence.
The fact that someone is a nominee does not automatically make that person a criminal. Nor does the appearance of a relative or associate on a corporate record establish concealment.
The issue is control.
Who makes the decisions?
Who supplies the capital?
Who determines the contracts pursued?
Who controls the money?
Who receives the economic benefit?
Who can cause the company to act?
That is the point at which the corporate veil ceases to be merely a legal concept and becomes an investigative question.
A company cannot explain who gave the instruction.
A company cannot identify who ultimately benefited.
A company cannot go to prison.
Where evidence establishes that a natural person knowingly participated in an offence, the investigation must follow that person as well as the company.
This is also where public procurement becomes critical.
Beneficial ownership information should not sit in one government compartment while procurement information remains in another. Where legally permissible, the two should be interrogated together.
The objective is to identify concealed relationships between contractors, recurring directors, nominees, intermediaries, related companies and persons exercising control.
The same principle applies to taxation.
An apparent mismatch between a person’s declared economic position and the scale of companies or transactions associated with that person does not prove tax evasion, corruption or money laundering.
But it may justify verification.
The real question is whether the economic reality can be reconciled with the declared ownership, assets, corporate relationships and financial activity.
That is what financial intelligence is supposed to establish.
The final stage is recovery and prevention of re-entry.
If an investigation establishes that assets represent proceeds of crime or are otherwise subject to lawful recovery, the process should not end with prosecution. The appropriate legal mechanisms for restraint, forfeiture and recovery must be pursued.
And once a network has been exposed, the system must prevent the same actors from simply returning through another company.
That requires effective use of lawful director disqualification and other applicable restrictions, better information sharing and identity based risk controls across relevant agencies.
Otherwise, enforcement becomes a revolving door.
One company disappears.
Another appears.
The name changes.
The network remains.
That is why the success of the present corporate cleanup should not be measured principally by the number of names deleted from the register.
The more important measures are different.
How many high risk corporate structures were identified?
How many discrepancies in beneficial ownership were investigated?
How many concealed control arrangements were established through evidence?
How many financial intelligence leads became substantive investigations?
How many cases were referred for prosecution?
How many prosecutions followed?
How much property was lawfully restrained?
How much was ultimately recovered?
And how many networks, rather than merely corporate names, were dismantled?
These are the measures that distinguish administrative compliance from enforcement.
Nigeria has taken important steps in building the corporate transparency infrastructure. The CAC has the Beneficial Ownership Register. The NFIU has the financial intelligence mandate. The legal framework for investigation, prosecution and asset restraint exists across the relevant institutions.
The challenge now is to connect the pieces.
The register should generate intelligence.
Intelligence should generate investigation.
Investigation should produce evidence.
Evidence should produce prosecution where an offence is established.
Proceeds should be traced and lawfully recovered.
And the people behind the structures should not be allowed to disappear simply because the corporate name has disappeared.
If the exercise ends with the announcement that a company has been delisted, the register may be cleaner.
The more important question is whether the person behind the company has been found, the money traced, the evidence tested and the law allowed to take its course.
*Ogundipe, public affairs analyst, former president of Nigeria Union of Journalists and Africa Union of Journalists, writes from Abuja.
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