Deeply concerned about the newly-introduced legal provisions of the Companies and Allied Matters Act 2020, civil society groups under the aegis The Action Group On Free Civic Space has faulted the CAMA Act, pointing at the duplicity of roles and overlapping regulatory powers.
Also, the coalition group observed that recently added provisions establish a new form of eminent domain, saying that the recently-added provisions appear to be fixated on enlarging governmental powers to suspend and remove the trustees of an association, thereby taking over the administration or management of the association’s property and bank credits.
The group comprising 32 organisations in a statement made available to newsmen in Lagos on Wednesday said it also “hampers the development of democratic processes by encouraging the waste of scarce public funds, weakening existing institutions and creating excessively complicated administrative procedures for law enforcement”.
Some of the signatories include: Victoria Ibezim-Ohaeri (Spaces For Change), Phllip Jakpor (Corporate Accountability & Public Participation), Okechukwu Nwanguma (Rule of Law and Accountability Advocacy Centre (RULAAC), Mike Utsaha (Cultural Communication and Legal Resource Centre, Joy Ngwakwe (Center for Advancement of Development Rights (CEADER), Vicky Uremma Onyekuru (Child Health Organiation (CHO), Lagos, Fyneface Dumnamene (Youth and Environmental Advocacy Centre) etc
Although the group lauded the efforts of the Commission at introducing legal reforms aimed at easing the processes for running the affairs of corporate bodies, and tackling corporate governance challenges internally and externally, it said the recent CAMA regulations are particularly reminiscent of the prescriptions of the rested 2016 NGO Bill sponsored by Umar Buba Jibril, which aimed to interfere with NGO assets.
Part of the observations of the group according to the statement is that: “CAMA 2020 establishes a new form of eminent domain. The recently-added provisions appear to be fixated on enlarging governmental powers to suspend and remove the trustees of an association, thereby taking over the administration or management of the association’s property and bank credits.
“A number of the new CAMA provisions are punitive in nature. They confer excessive powers on the government to overly restrict or interfere with NPO operations.
“The Commission’s powers to unilaterally disrupt and displace the expressed intentions and aspirations of the members relegates the constitution or memorandum of an association, rendering it nugatory.
“By interfering with the rights of associations to associate and self-govern freely, Sections 838,839 and 842 of CAMA 2020 contradict constitutionally-protected freedoms, particularly the freedom of association.
“The new functions of the Corporate Affairs Commission (the Commission) duplicates the roles of existing regulatory agencies charged with uncovering and punishing financial crimes such as the Special Control Unit Against Money Laundering (SCUML) and the Economic and Financial Crimes Commission (“EFCC”).
The group further expressed worry about the danger of excessive focus on properties belonging to Associations. “The fixation on sacking an association’s trustees and taking over the administration or management of an associations property and bank credits is deeply worrying. The entirety of S. 839 (6) represents a new form of eminent domain. Empowering the Commission to vest the association’s property in the hands of an official custodian, or order debtors to discharge their liabilities in an interest-yielding account held by the Commission for the benefit of the association, and to restrict the association’s transactions, essentially take away property rights just as much as an eminent domain does. The only difference is that the CAMA provisions allow the government, through the Commission, to evade the just compensation requirement through the trick of appointing interim managers.
“Excessive Interference in the Activities of Associations, meaning that a number of provisions in CAMA 2020 are punitive in nature and confer excessive powers on the government to overly restrict or interfere with NPO operations in the country.
“There are no provisions enabling associations to use their internal controls to take corrective actions when their activities go off track, denying registered associations the opportunity to use their internal mechanisms to self-correct or redress any perceived or actual wrongs. External intervention should only be initiated as a last resort where internal mechanisms have been inefficient in dealing with corporate governance issues.
“Under the new CAMA, the Commission may dissolve an association with dormant bank accounts and transfer the amount standing to their credit to another or other associations. This provision interferes with the rights of members of an association to freely dispose of their assets upon dissolution. It also changes the rules that govern how owners can use or dispose of their property”. It noted.