THE INEFFICIENCY OF DISCLOSING PERSONS WITH SIGNIFICANT CONTROL OF A COMPANY IN TACKLING THE MENACE OF MONEY LAUNDERING IN THE NIGERIAN CORPORATE SPACE.
By Ajibola Bello, Esq. Deputy Managing Partner and Head, Corporate, Commercial and Industrial Law, (CCI) Practice Group, Law Corridor.
During the High-level Policy Dialogue on Critical Issues Affecting Nigeria’s Real Estate Ecosystem, organized by Law Corridor on the 6th of August 2025, a pressing concern deliberated upon was the utilization of the Real Estate Ecosystem for the laundering of illicit funds. Notably, the Executive Chairman of the Economic and Financial Crimes Commission (EFCC), Mr. Ola Olukoyede, alongside the Director of the Special Control Unit Against Money Laundering (SCUML), Mr. Harry Erin, were present as principal advocates for the imperative of Real Estate Developers refraining from facilitating money launderers in perpetrating their nefarious activities.
In the same vein, it was observed that numerous corrupt officials exploit the operations of real estate companies, masquerading as legitimate investors and equity stakeholders, while utilizing these entities to manage illicit funds in a manner detrimental to the sector.
In his contribution to the dialogue, Mr. Lawal Michael, Assistant Director of Compliance at the Corporate Affairs Commission (CAC), articulated the measures the CAC has instituted to combat money laundering. He underscored that the Companies and Allied Matters Act (CAMA) 2020 encompasses provisions mandating the disclosure of “Beneficial Interest” in companies. Mr. Lawal emphasized that the requisite disclosures within the Register could be instrumental in identifying ownership, thereby aiding in the tracing of illicit funds deployed within corporate operations.
In light of the aforementioned assertions by the CAC representative, this article seeks to elucidate the inadequacies of the “Beneficial Interest Register,” which is designed to document the particulars of Persons with Significant Control with the CAC in the overarching battle against money laundering, particularly within the Real Estate Ecosystem.
“While the intent behind these provisions is commendable, it is imperative to recognize that individuals such as current and former government officials, internet fraudsters, and other money launderers are unlikely to disclose their identities as shareholders in company incorporation documents”
To provide context, sections 119 and 120 of CAMA 2020 delineate the obligations regarding the disclosure of shareholding capacities as Persons with Significant Control. Section 119 mandates that every individual exerting significant control over a company must notify the company of such control within seven days. Subsequently, the company is required to inform the CAC within one month of receiving this information, with penalties imposed by the CAC for any defaults by either the individual or the company. Section 120 similarly pertains to public companies, stipulating that any individual with substantial shareholding—defined as holding, directly or through a nominee, shares conferring 5% unrestricted voting rights at a general meeting—must notify the company within 14 days, with the company in turn obligated to notify the CAC within another 14 days. Failure to comply with these notification requirements incurs fines as prescribed by the CAC.
While the intent behind these provisions is commendable, it is imperative to recognize that individuals such as current and former government officials, internet fraudsters, and other money launderers are unlikely to disclose their identities as shareholders in company incorporation documents. This is primarily due to their desire to remain untraceable. Indeed, such individuals can best be characterized as shadow shareholders or directors. They often engage the services of a trustee, operating under a veil of undisclosed trusteeship, to hold their shares and have the trustees act according to their directives.
Consequently, the Register of Beneficial Interest/Persons with Significant Control/substantial shareholding, which lacks any investigative rigor on the part of the CAC and is largely predicated on the discretion of companies and shareholders, bears little relevance to the disclosures of individuals who inject illicit funds into companies and simultaneously derive benefits from such investments.
To further substantiate this argument, it is noteworthy that during the Policy Dialogue, the Executive Chairman of the EFCC acknowledged the necessity for the CAC to collaborate with the EFCC in tracing illicit funders and investors within companies. He asserted that the EFCC possesses the capability to conduct thorough investigations and provide a comprehensive register to the CAC, which could serve as a checklist during the company registration process.
In conclusion, it is crucial to promply comprehend the limitations of the Register of Beneficial Interests as curated by the CAC, so as to boost the urgency of collaboration with other regulatory entities, including the EFCC, in enhancing the profiling of funders and investors in companies used for money laundering.
Ajibola Bello, Esq is a Senior Partner and Group Lead, Corporate, Commercial and Industrial Law (CCI) at Law Corridor, Abuja | ajibola@lawcorridor.org | +2347063752705