He said it has, therefore, become “a matter of life and death” for African countries to break the wall of secret corporate ownership.
Osinbajo stated this in his address at the Extractive Industries Transparency Initiative Beneficial Ownership Conference taking place in Jakarta, Indonesia.
“I will be preaching to the converted if I say that hidden corporate ownership poses real and present danger to most countries, especially the developing ones such as ours,” he told the gathering.
He said experience had shown that anonymous corporate ownership could serve as vehicles for masking conflicts of interest, corruption, tax evasion, money laundering, and even terrorism financing.
Osinbajo cited a 2014 report by the One Campaign, titled the “One Trillion Dollar Scandal” which claimed that developing countries lose $1trn annually to corporate transgressions, most of it traceable to the activities of companies with secret ownership.
He also mentioned the 2015 report of the High Level Panel on Illicit Financial Flows from Africa chaired by former South African President Thabo Mbeki which started that Africa had lost over $1trn over a 50-year period and that Africa loses more than $50bn annually to illicit financial flows.
Osinbajo said, “Most of these illicit flows are perpetrated in the extractive sector and through companies with hidden ownerships.
“So for us in the developing world and especially in Africa, breaking the wall of secret corporate ownership is an existential matter. It is for us literarily a matter of life and death. Masked or Hidden corporate ownership is deeply implicated in the sad story of our underdevelopment.
“Yes, we know that anonymous companies are not always illegal or are not always designed to harm. But we also know that secrecy provides a convenient cover for the criminal and the corrupt. And we are not just operating from the theoretical or hypothetical standpoint.
“Our lived experience has shown clearly that anonymous corporate ownership could serve as vehicles for masking conflicts of interest, corruption, tax evasion, money laundering, and even terrorism financing.”
Osinbajo, however, said the problem was not limited to developing worlds.
He noted that in the current inter-connected world, anonymous companies have footprints and tentacles that do not respect the developed/developing divide.
He said although the degree of exposure may differ, everyone in today’s world was at risk of the dangers posed by anonymous corporate ownership.
He cited the Panama Papers as an illustration of the global scale and spread of the problem.
“So, this is a global challenge and nothing less than a truly global approach will be needed to tackle it,” Osinbajo posited.
He commended the United Kingdom, Norway, Netherlands and Denmark for leading the way in establishing public registers of the real, human owners of companies in their countries.