The Nigerian Financial Intelligence Unit (NFIU) says it would begin to de-register shell companies by September.
Modibbo Tukur (pictured), the NFIU director, announced on Thursday that the unit would publish the criteria for companies to keep their registration status.
Shell companies are inactive entities or companies registered for future purposes.
This, he said, would rid the system of shell companies that could potentially be used for fraud.
He said for companies to exist, they should have physical addresses.
“If anyone establishes a company, it has to be a company indeed and we have to be firm on this,” he told Mary Uduk, the acting director-general of the Securities and Exchange Commission (SEC).
“This has become more important now given the rollout of the Economic Community of West Africa States (ECOWAS) single currency because, with that, we know that capital and investments will move across borders and it is a single currency.
“So, we have to step up regulation to avoid fraudulent transactions. We will begin by September and some companies will have to be deregistered if they do not meet the criteria.
“We will publish the parameters and also give them enough time to regularise after which those that do not comply before the deadline will be shut down.
“If you have an empty company hanging in the system, it is a potential danger and we should not allow it to thrive.”
NFIU and SEC signed a memorandum of understanding on Wednesday to combat Ponzi schemes and fraud in the capital market.
Uduk said the collaboration was necessitated by the need for SEC and NFIU to close ranks in the face of “insider dealings, the reawakening of Ponzi schemes, cybercrime and other fraudulent activities that have engulfed the market in the last few years”.
According to her, the MoU covers training, secondment of middle cadre officers between the organisations, cross-border monitoring, repatriation of stolen funds from the capital market and prosecution of offenders, among others.
On the rising incidence of Ponzi schemes in the country, Uduk said there is a need for more public sensitisation to ensure that unsuspecting Nigerians do not continue to lose their hard-earned money.