The 2020 CAMA and Beneficial Ownership in the Extractive Industry
Communications
3 September 2020
By Charles Uche ESQ
Incorporating and fronting companies is a convenient and effective way of concealing identity, engaging in illicit transactions and evading liabilities. In many countries, a company can be formed without disclosing the identity of the individual who ultimately controls or profits from the business, i.e., the beneficial owner. Criminals and politically exposed persons (PEPs) can assign “nominee” shareholders to be listed on official documents or can list other legal entities (other companies can be shareholders in a company) as the “owners,” thereby creating a chain of companies–often across borders–that can be difficult for investigators and law enforcement to trace and recover.
Connected Development (CODE), has over the year, through its Conflict & Fragility project, in partnership with Oxfam-in-Nigeria advocated for a robust beneficial Ownership transparency through the instrumentality of a robust legislation as an essential means for combating corruption, stemming illicit financial flows, and fighting tax evasion. While many initiatives exist to maintain and disclose beneficial owners of companies in Nigeria, like the Beneficial Ownership Register launched by Nigeria Extractive Industries Transparency Initiative (NEITI) in December 2019, none of them until the enactment of the 2020 Companies and Allied Matters Act (CAMA) had the statutory backing for enforcement.
Documents from Panama papers on Dan Etete and Kolawole Aluko can be used as classical case studies in demonstrating how these two individuals, like many others, capitalised on the non-existent or fragile regulatory framework in Nigeria’s extractive “oil & gas” sector to launder money and evade liabilities which has cost the Nigerian government and people revenue in the billions of dollars. Till date, none of the aforementioned persons has been successfully prosecuted and convicted partly due to concealment of identities and fronting of shell companies in their transactions. Shell companies are legal entities “companies” that are non-operational and lack assets or staff. They are conveniently used by money launderers to keep their identities hidden while they engage in illicit transactions across borders and evade tax.
Dan Etete: Dan Etete, a former Petroleum Minister under Nigerias Dictator Head-of-State, Gen. Sani Abacha had in 1998, incorporated a Shell company named “Malabu Oil & Gas Limited” using a fictitious name “Kweku Amafegha”, with few other persons, while he was the ultimate and beneficial owner of the company – though his real name did not appear in any official documents. Five days after he incorporated this company, he, as Petroleum Minister, awarded this company an oil block “OPL 245”. He used this shell company to launder money across the Nigerian border and acquire luxurious assets, while escaping liabilities.
Kolawole Aluko: Kola Aluko is a businessman and oil executive. Media reports have described Aluko as a key ally to Alison-Madueke, a relationship both have previously denied. He rose to prominence around 2011 when Nigeria’s government awarded two companies he founded or owned valuable oil blocks on a no-bid basis. One of his companies, Atlantic Energy, was created the day before it inked the deals to acquire multimillion-dollar oil licenses.
In Nigeria, only a member of a Public Company (PLC) was under obligation, under the old 1990 CAMA, to disclose in writing when required, the capacity in which he holds any shares in the company; either as a beneficial owner or as a nominee of an interested person. See Sections 94-98, old CAMA.
The 2020 CAMA in section 119 has extended such obligation (to disclose the particulars of shareholding by notifying the company) to persons with significant control in all companies. Similarly, as provided in section 120 of the new CAMA, a person who is a substantial shareholder in a public company and holding (either by himself or by his nominee/proxy) shares in the company which entitle him to exercise at least five per cent (5%) of the unrestricted voting rights at any general meeting of the company, is required to disclose such holding by notifying the company within a stipulated time.
This new disclosure provisions are poised to enhance transparency and prevent asset shielding as well as combat money laundering, terrorism financing and all forms of illicit financial flows by legal entities having limited liability.
While there is no gainsaying that the above disclosure provisions would enhance transparency and accountability in the Extractive sector in Nigeria, especially in the Petroleum Industry, as many of the oil and gas companies are private limited liability companies (LTD); many of which have ‘rightly’ escaped disclosure obligations with no legal sanction – there is also an urgent need for the enactment of the Petroleum Industry Governance Bill (PIGB) which has as one of its core objectives – “to promote transparency and accountability in the administration of petroleum resources of Nigeria”.
Wow that was strange. I just wrote an incredibly
long comment but after I clicked submit my comment didn’t show up.
Grrrr… well I’m not writing all that over again. Anyways, just wanted to say wonderful blog!
%%
my homepage: doubleglazing (Renate)
%%
Review my website; Glass Repairs
%%
Feel free to visit my blog; Car accident Lawyer
%%
Here is my blog post; upvc doors st albans
%%
Feel free to surf to my page; mens leather jackets uk
%%
Here is my webpage investors Looking for projects to fund in namibia
%%
my web page: cbd Oil For dogs uk
%%
my website … Cbd Tinctures Oil
%%
my web-site :: Pitch Deck Consultant
%%
Feel free to surf to my webpage; leather puffer jacket
%%
Feel free to surf to my web-site – Penis enlarger
%%
Also visit my web blog; doors Willenhall (Krystle)
%%
Visit my homepage Search Engine Optimisation Services
%%
Have a look at my web page – Patio Doors Aldridge
%%
Also visit my webpage; Pengeluaran hk 2022
%%
Here is my web page :: House windows Barnet
%%
My web blog – large mens leather jackets
%%
Review my blog – Bifold Doors Lewisham
%%
Also visit my site … Windows repair luton; https://ourclassified.net,
%%
my web blog :: Netsuite Partners
%%
Also visit my website adhd assessments near me
%%
Feel free to surf to my web blog: grey suede jacket mens
%%
Also visit my web blog – suede Leather jacket for Men
%%
Here is my webpage netsuite Partners
%%
My web blog :: Search Engine Optimisation Google
%%
my blog … Upvc Doors St Albans
%%
my blog: broken Car key repair
I’m not that much of a internet reader to be honest but your blogs really
nice, keep it up! I’ll go ahead and bookmark your site to come back later on. All the best
%%
Also visit my website car Injury
%%
My homepage … window Repairs near Me
%%
Here is my webpage – Audi Spare Keys
%%
Take a look at my web blog; sexy toys Near me
%%
Here is my web blog: best cbd for Pets near me
%%
my website – glass fitter Near Me
weed hangover
I really appreciate your great efforts because your content helped me a lot, thanks
%%
My blog Glass Repairing
%%
Check out my web-site: upvc window repairs
Hi there it’s me, I am also visiting this website on a regular basis, this web
site is in fact fastidious and the users are actually sharing nice thoughts.
Feel free to surf to my web page – 메이저사이트
%%
Feel free to visit my site; wandsworth windows
%%
my website Replacement Windows Luton
%%
Feel free to surf to my blog; Pitch deck specialist
%%
My page; private adhd assessment uk
%%
My web site penis enlarger pump for sale
%%
Here is my page … land rover Replacement key
%%
Check out my web page men’s leather Jackets
%%
My web page: penis enlargement pump for sale (Libby)
Hi, everything is going well here and ofcourse every one is sharing
facts, that’s genuinely fine, keep up writing.
Distillate Pen
Great job for publishing such a piece of valuable information with us.
Hello! Someone in my Facebook group shared this site with us so
I came to take a look. I’m definitely enjoying the information. I’m bookmarking and will be tweeting this to my followers!
Outstanding blog and excellent style and design.