Connect with us
Advertise With Us

COVER STORIES

FG Reads Riot Act To MDAs Over Contracts With Fake Companies

Published

on


By Catherine Agbo, Abuja
The federal government is taking steps to ensure that all government Ministries, Departments and Agencies (MDAs) no longer transact business with fictitious and unregistered companies, LEADERSHIP Sunday investigations have revealed.
This followed findings that some of the MDAs had been transacting businesses with companies and other corporate bodies not validly registered with the Corporate Affairs Commission (CAC) as required by the Companies and Allied Matters Act (CAMA).
The federal government, it was learnt, took the step after it was discovered that many unregistered companies, with no traceable addresses or known boards of directors, had defrauded it of funds running into hundreds of billions of naira in some transactions and agreements between them.
A source in the office of the Secretary to the Government of the Federation (SGF) who is familiar with the issue told LEADERSHIP Sunday that after carrying out a review of contracts between the federal government and some companies, it was discovered that some of the companies were either non-existent, as they were not registered and that the names of directors given were fictitious in some cases, while in some other cases, they never existed.
The source who did not want his name in print said, “The federal government discovered that it had lost billions of money to some of these fake companies.
“It was also found out that this was the reason why some government projects never go beyond the stage of signing memorandum of understanding (MoU) as in some cases, the fake companies were found out and the agreements terminated”.
Consequently, the Secretary to the Government of the Federation (SGF) in a circular dated April 25, 2017, with Ref. No. CS.14/T/204 stated that following the discovery, government had decided that henceforth, no MDA should transact business with any company or corporate body that does not comply with provisions of section 278 of the Companies and Allied Matters Act (CAMA).
Section 278 of CAMA, titled “Particulars with respect to directors in trade catalogues, etc.” specifies that “(1) Every company to which this section applies shall, in all trade circulars, show cards and business letters on or in which the company’s name appears and which are issued or sent by the company to any person in Nigeria, state in legible characters with respect to every director the following particulars:
“(a) his present forename, or the initials thereof, and present surname; (b) any former forenames and surnames; (c) his nationality, if not a Nigerian:
“Provided that, if special circumstances exist which the Commission is of the opinion render it expedient that such an exemption should be granted, the Commission may, subject to such conditions as it may prescribe by notice published in the Gazette, exempt a company from the obligations imposed by this subsection.
“(2) This section shall apply to every company incorporated under this Act, or any enactment repealed by it. (3) If a company makes default in complying with this section, every officer of the company who is in default shall be guilty of an offence and liable on conviction for each offence to a fine of N50:
“Provided that no proceedings shall be instituted under this section except by, or with the consent of, the Attorney-General of the Federation. (4) For the purposes of this section: (a) “initials” includes a recognised abbreviation of a forename; (b) references to a former forename or surname in the case of a married woman do not include the name or surname by which she was known previous to the marriage; and (c) “showcards” means cards containing or exhibiting articles dealt with, or samples or representations thereof.”
The circular, titled, ‘Administrative policy on the need for strict compliance with the provisions of section 278 of the Companies and Allied Matters Act with respect to companies letter head and papers’ was signed by Dr Mrs Habiba M. Lawal, permanent secretary, Ecological Funds Office.
It was addressed to the chief of staff to the president; deputy chief of staff, office of the vice president; ministers and ministers of state; Head Of Civil Service Of The Federation; chairman, Federal Civil Service Commission; chairman, Federal Character Commission; chairman, Independent National Electoral Commission (INEC); chairman, Revenue Mobilisation, Allocation And Fiscal Commission; chairman National Population Commission; chairman Code Of Conduct Tribunal and chairman, Code Of Conduct Bureau.
The circular was also sent to special advisers and senior special assistants; service chiefs/inspector-general of police; chairman, independent corrupt practices and other related offences commission, chairman economic and financial crimes commission, chairman, national drug law enforcement agency; chairman, National Assembly Service Commission; clerk of the National Assembly; chief registrar, Supreme Court of Nigeria, secretary, National Judicial Council, Auditor-General for The Federation, Accountant-General of The Federation and heads of extra-ministerial departments, directors-general, chief executive officers of parastatals, agencies and government-owned companies.
According to the circular, before government transacts business with any company going forward, “the registration number (RC) as issued to the companies by the CAC must appear on their letter head with the contact telephone numbers, valid e-mail address and official company address; and that the letter head paper must bear the name and the nationalities of the directors of the company at the bottom of the page”.
The federal government said the decision was taken to ensure transparency in the dealings of government with corporate entities anto ensure compliance with the CAMA.
It further stated that the listed requirements would henceforth be the condition for payment of all government contracts.
When asked what action the federal government was taking on the matter, beyond issuing the circular, our source said the circular was the first step and that other actions would follow.
“The federal government will definitely take action in some of the cases even though the course of action is still being decided”, the source stated.





Advertisement
Comments

MOST POPULAR