FG On Another "Anti-Masses" Mission

The plan by the Federal Ministry of Power, Works and Housing to inaugurate and appoint two non-executive directors for each of the 11 distribution companies (DisCos) is yet another fatwa against the wellbeing of the suffering masses of this Nation. 

There are more than enough realities that suggest the process as illegality of highest order because it is not consistent with extant regulations.

The cancellation and or suspension of the inauguration may not be unconnected with a realisation of its illegality.

I have also listened to an argument where a top commentator was quoted as follow: 

“The appointment of non-executive directors violates the Companies and Allied Matters Act (CAMA); Memorandum of Association and Articles of Association of the Discos; and the acquisition and privatisation documents executed by the Discos, the investors and the Bureau of Public Enterprise, that is, the shareholders’ agreements,”. 

*This is yet to be introverted by the federal government and its agents* .

It was further argued that CAMA is the principal statute regulating companies in Nigeria, stressing that CAMA specifies who has the power to appoint directors and the procedure for such appointments. Citing Section 248 of CAMA, it was added that it is the members in a general meeting or in the event of a casual vacancy, the board of directors of a company that has the powers to appoint new directors, according to Section 249 of CAMA.

What the above signify is that while it is not controvertible that the BPE and MOFI (Ministry of Finance) are shareholders of the company, I am not convinced that the bodies can unilaterally appoint new directors.

Such power can only be exercised collectively by a resolution decided by a simple majority vote of the shareholders present, in person or by proxy, at the general meeting.

It has also been discovered that any person empowered by the Memorandum of Association and Articles of Association of a company may appoint directors in line with Section 41 (3)). Memorandum of Association and Articles of Association of each of the Discos do not give the President or the Ministry the power to appoint directors of Discos.

The purported appointment of non-executive directors to the board of each Disco can’t be a valid process in line with the aforementioned. 

The Memorandum of Association of Discos as perused also provides that unless determined by members in general meeting, directors shall not be more than 7 Directors. Section 249(3) CAMA says directors cannot exceed the number allowed by the articles. 

It is also a fact that the planned appointment of non-executive Directors by the federal government is not consistent with the Shareholders Agreement (SHA) between Bureau of Public Enterprise (BPE), Ministry of Finance (MOFI), investor and Discos.

Shareholders Agreement (SHA) states that the number of directors in the Disco shall be no more than seven according to Clause 5.1. In addition, the SHA also provides that the investor shall nominate six directors, while BPE and MOFI shall nominate one in line with Clause 5.2. Any covenant adjustment to Clause 5.2 has to be in accordance with Clause 15.14 which requires that variations will only be valid if made in writing and signed by all parties. On the basis of the above, it is save to conclude that the proposed appointment is inconsistent with the provisions of the SHA too.

In conclusion, the grieve implication of the monumental illegality being planned by federal government is that it is capable of discouraging potential foreign investors into the Nigerian power sector and THAT WILL PROLONG THE POWER FAILURES AND OUTAGES THAT BUHARI LED GOVERNMENT HAVE FAILED TO HAVE ANSWER TO INSPITE OF ELECTORAL PROMISES TO THAT EFFECT.