The Corporate Affairs Commission (CAC) said it has commenced the process of taking drastic actions including shutting down Point of Sales (PoS) businesses that have failed to register their businesses as its September 5 deadline lapsed.
The Commission stated this in a public notice released on Friday. While noting there was inadequate compliance with its directive, it said those who decided not to register may be engaging in “unwholesome activities.”
This development comes as the fintech business owners under the aegis of the Association of Mobile Money and Bank Agents in Nigeria (AMMBAN) have challenged the CAC’s registration directive in court even as they insist the mandatory registration was illegal.
What the CAC is saying
Providing an update on the registration after the Thursday deadline, the CAC in the public notice said:
“The Corporate Affairs Commission wishes to remind the general public particularly Fintech operators also known as Point of Sale (POS) operators, that the 60-day deadline given in daily newspaper publications of July 7 2024, for the registration of such businesses expired on September 5, 2024.
“The Commission notes inadequate compliance with the directive for formalization when viewed from the background of the large number of POS operators in the country. Those who have taken steps to formalize in line with the Commission’s directive are commended for their positive attitudes.
“Recalcitrant operators have refused to adhere to the advice for formalization due possibly, to engagements in unwholesome activities or for some reasons best known to them.
“We are to make it clear that the Commission is working with Law Enforcement Agencies and other relevant stakeholders to deploy comprehensive enforcement and sanction framework that may include not only possible shutdown but other severe legal Consequences.”
Backstory
Earlier in May, the CAC announced that PoS agents of major fintechs in Nigeria including OPay, Palmpay, and Moniepoint, among others, had been given a deadline of July 7, 2024, to register their business.
- The Registrar-General of the CAC, Hussaini Magaji, who announced this said this was the agreement with the PoS operators after a meeting in Abuja.
- According to him, the registrations is also in line with the legal requirements and the directives of the Central Bank of Nigeria (CBN).
- The Commission, however, later extended the deadline by 60 days to September 5, 2024. The extension came with a warning that any operator that failed to meet the new deadline would face prosecution and risk losing the business.
- Meanwhile, AMMBAN is insisting that the registration requirements imposed by CAC violated the provision of the Companies and Allied Matters Act, Laws of the Federation of Nigeria, 2004, which “explicitly states that the commission has no jurisdiction over individuals not operating as a company.
According to the national general secretary of AMMBAN, Oluwasegun Elegbede, the matter is already in court and the court has scheduled this September for hearing.
“The court will have to intervene in the interpretation of the quoted section of the CAMA if individuals operating as a sub-agent (likened to a bank branch) must register with CAC,” Elegbede added.
What you should know
- The directive on registration of PoS business came against the backdrop of frequent fraud incidents involving POS terminals and plans to stop trading in cryptocurrency or any virtual currency by the Central Bank of Nigeria (CBN).
- According to a report by the Nigeria Inter-Bank Settlement System (NIBSS) Plc, POS terminals accounted for 26.37% of fraud incidents in 2023.
- Meanwhile, the Registrar-General of the CAC, Hussaini Magaji, has said that the registrations are backed by Section 863, Subsection 1 of the Companies and Allied Matters Act, CAMA 2020 as well as the 2013 CBN guidelines on agent banking.
- He said the registration is aimed at safeguarding the businesses of fintechs and customers, as well as strengthening the economy.
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