Follow Money Trail To Determine Beneficial Owners, NNPC Advocates

…NEITI to release 2016-2017 oil, gas audits, 2012-2016 FASD reports this year


The debate around Beneficial Ownership (BO) was at the fore of a stakeholders workshop on Validation organised by the Nigeria Extractive Industries Transparency Initiative (NEITI) in Abuja Wednesday, as the Nigerian National Petroleum Corporation (NNPC) advocated “following the money” to unmask “real beneficial owners”.

Speaking on the topic: Commodity trading and beneficial ownership, Mr. Mele Kyari, Group General Manager, Crude Oil Marketing Division of the Corporation, said all stakeholders must work together and to determine who beneficial owners of companies are.

“We all know that the names on most companies registration with the Corporate Affairs Commission (CAC) are just mere names of people who get commission from the real owners. When we (NNPC) request for list of beneficial owners of trading companies, they simply give us a list of all their shareholders,” he said.

Mr Kyari however, said he believes the money trail can be followed to unmask who he real owners are. “We need collaboration between government, companies, banks and security agencies to come to an agreement on how to determine beneficial owners.

“The closest NNPC can do is to insist that companies provide details of people who have at least 5 – 10 percent shares and we consider that beneficial owners. If we trace beyond that, then it will seem we are tracing crime. The security agencies can follow the cash, the banks can follow the cash to get to beneficial owners. But we are not looking for crime we are looking for beneficial owners so we can properly tax them,” he said.

Mr Waziri Adio, Executive Secretary of NEITI in his remarks also said stakeholders have to collaborate to determine the best way to achieve the common objective.

“We need to determine whether we need to amend the companies registration law, or result to executive order to compel companies to provide list of real significant beneficial owners,” he said.

Adio stated this against the background that there is currently no law that compels companies to provide details of real owners. “So companies have not committed any crime by giving list of shareholders as BO,” Adio said.

However, some stakeholders suggested that elements of voluntary disclosure rather than a rigid law, will help Nigeria achieve true identities of real BO.

If it is hard cast in law, participants said the purpose may be still defeated as people will devise ways to beat the law, but if it is voluntary with perhaps some incentives it could be achieved they posited.

Meanwhile, earlier in his presentation titled, Beyond validation: Scaling up NEITI’s impact, Adio disclosed that the 2016, 2017 oil and gas sector reports will be released this year. “We are about completing 2016 report procurement for 2017, so that we can clear the backlog,” he said.

He also disclosed that NEITI will conduct the Fiscal Allocation and Statutory Disbursements (FASD) report for 2012 – 2016 this year, adding that NEITI is working to automate it’s data gathering process to make the system more secured, timely, engaging and accessible.

Also in his presentation, titled making EITI validation useful, Regional Director, EITI, Mr Pablo Valverde, described Nigeria as the “big brother” of EITI standards given the depth of the countries audits and publications.

Nigeria, he said, is currently rated as “meaningful progress” on the EITI global ranking standard, which is the same rating for countries like Norway and a host of others.

“This means that Nigeria has an extremely complicated and comprehensive extractive sector. Nigeria has exceeded EITI requirements in a number of areas. Nigeria has done very well in areas that are difficult for many countries. Nigeria is very important in the EITI global community,” Valverde said.

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