IBLC RETREAT

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IBLC RETREAT 14TH 18TH MAY 2008 SOUTH AFRICA

• EMERGING CORPORATE GOVERNANCE REGIMES IN NIGERIA

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ESSENCE OF PAPER

• To highlight interesting and encouraging
  Corporate Governance trends in Nigeria
• Several of these trends are novel for Nigeria and
  are changing the Corporate Landscape.

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CLASS ACTIONS

• CADBURY PLC
• SHAREHOLDERS sue company, directors, accountants
  and stockbrokers for losses suffered due to
  account overstatements and negligence.
• FIRST BANK PLC
• SHARE SUBSCRIBERS sue for damages after
  their monies where held over and returned
  because the Public Offer was oversubscribed.
• BRITISH AMERICAN TOBACCO
• STATE GOVERNMENTS sue British American Tobacco
  claiming compensation for health bills incurred
  by the States due to Tobacco induced ailments.
  

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2005 BANK CONSOLIDATION POLICY

• Minimum Paid Up Share Capital Before 2005
• 2 billion Naira.
• Minimum paid Up Share Capital Post 2005
• 25 billion Naira.
• RESULTS
• a) Diversifies Ownership Structure
• b) Greater ability to meet financial commitments
• c) More Long term funds available for lending
• d) Higher accountability regimes
• e) 89 banks now reduced to 25

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NEW CENTRAL BANK REGULATIONS

• Government cannot hold (directly or indirectly)
  more than 10 of any Bank
• At least 2 Independent directors must be on the
  Board
• Above 10 Equity in any Bank needs CBN prior
  approval
• Board Chairman cannot be Managing Director
• No 2 members of an extended family shall be
  Chairman and CEO or Executive Director at same
  time.

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Securities Exchange Comm. Interventions

• Sanctioning Powers E.g Cadbury subscribed
  Public Offers
• Rigorous registration for Capital Market
  Operators
• Introduced Professional Indemnity Insurance
• Introduced half yearly report format for PLCS
• Insist on International Financial Reporting
  Standards (IFRS) for PLCS
• Post Transaction Inspections
• Increase Share Capital for Stockbrokers

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SCUML SPECIAL CONTROL UNIT AGAINST MONEY
LAUNDERING

• Who is in the Suspicious Transaction Trap?
• All Financial Institutions
• Designated Non-Financial Institutions (DNFIs)
  which include
• Legal Practitioners
• Chartered Accountants
• Audit Firms
• Tax Consultants

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NEW FACE OF BANKING

• Reporting Requirements to EFCC
• - every transaction by an Individual involving in
  excess of 1 million Naira.
• - every transaction involving a corporate body
  involving in excess of 5 million Naira.
• - reports must be filed within 7 days.

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NEW FACE OF BANKING
Know Your Customer Standards - required to keep
records of every customers identity and
transactions for at least 5 years. - Banks are
required to obtain identification evidence of
customers before entering into a banker-customer
relationship with them.
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DIRECTORS CULPABILITY

• Directors are personally liable to lenders for
  misappropriation of borrowed funds. S.290 CAMA
• Any Indemnity or exemption from liability given
  by a company to a director or auditor is void. S.
  67 CAMA

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THANK YOU FOR LISTENING