Non-Disclosure Of Owners Of Corporate Entities Dangerous – NEITI

The Executive Secretary of the Nigeria Extractive Industries Transparency Initiative (NEITI) Dr. Ogbonnaya Orji, has warned that the non-disclosure of actual ownership of some companies in the country is dangerous.

While addressing a forum of government agencies, companies, civil society and the media on beneficial ownership implementation in the extractive industry in Nigeria, he said illicit financial flows were associated to secret business ownership.

This was made known in a statement issued by the Head of Communications and Advocacy at the organisation, Obiageli Onuorah, on Monday.

Orji said that Nigeria had two commitments to beneficial ownership reporting, the first being compliance to the Extractive Industries Transparency Initiative (EITI), while the second was in response to the commitment made by Nigeria to the Open Government Partnership (OGP).

According to him, beneficial ownership disclosure has become very important in view of the serious dangers that secret ownership of companies pose to individual countries and the global community.

“Crimes like tax evasion, illicit financial flows and terrorism financing which are associated with or facilitated by secret ownership frustrates national development, increases poverty in developing countries and threaten the national security of even powerful nations,” Orji stated.

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He explained that NEITI was encouraged by the volume of work so far done by relevant government agencies and civil society on beneficial ownership reporting.

“NEITI will work out a joint coordination initiative with Corporate Affairs Commission (CAC), Department of Petroleum Resources (DPR) , Mining Cadastre Office (MCO), NFIU, EFCC, civil society, media and other anti-corruption agencies to help track beneficial owners of extractive assets in Nigeria”, he added.

According to Orji, a coordinating committee on beneficial ownership implementation in Nigeria will be established by the NEITI very soon.

He cited a report by an international anti-poverty organisation, stating that developing countries lose up to $1trillion a year from illegal activities perpetrated by secretive corporations.

Orji noted that the figure was seven times more than the total aid and foreign debt that flow into these poor countries.

He said, “The Thabo Mbeki report on illicit financial flows estimates that Africa loses up to $50 billion a year from some of these activities. Nigeria accounts for the lion share of these losses, with the extractive industry accounting for 93 per cent of total illicit financial flows from Nigeria.”

In his keynote address, the Registrar-General, Corporate Affairs Commission (CAC), Abubakar Garba, disclosed that the commission had commenced the collection and disclosure of beneficial ownership information from the January 3, 2021 following the passage of the Company and Allied Matters Act in November 2020.

“Every information on persons with significant control of companies is now available online on the commission website to members of the public free of charge and in line with Nigeria’s commitment to the global EITI and OGP. This is the least we can do to support transparency and fight against corruption”, he stated.

He explained that the commission was working to integrate beneficial ownership information into the national identity data base to ensure valid and correct information, adding that when information is publicly accessible, the public would be able to find out if there were errors.

The Executive Director, Civil Society Legislative Advocacy Centre (CISLAC), Auwal Rafsanjani, noted that the enactment of CAMA 2020 has provided legal backing for the beneficial ownership transparency, but warned that the register is not an end in itself.

Also addressing the forum from Oslo, Norway, the EITI Policy Director, Ines Marques, informed the audience that about 20 EITI implementing countries have undertaken legal reforms to facilitate ownership transparency, while 30 others have publicly disclosed some beneficial ownership information through EITI reporting.

“Beneficial ownership information has been used to avoid corruption and loss of revenue in the extractive sector, prevent corruption and illicit financial flows, enhance revenue collection, improve investment climate in the extractive sector and most importantly increase public trust and accountability,” she stated.