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Part XI

Mergers, Take-Overs and Acquisitions

 

 

99.  (1)     In this Part -

 

"bid" means an invitation or an offer;

 

"court" for the purpose of this Part mean s the Federal High Court;

 

"despatch" means communicate in any manner,

 

"directorsí circular" mean s a circular referred to in section 111 of this Decree;

 

"invitation" means a statement, however expressed, which offers to acquire shares from a person w ho holds shares;

 

"offer" means a statement, however expressed, that offers to acquire shares from a person who holds shares;

 

"offeree company" means a company whose shares are the subject of a take-over bid;

 

"offeror" means a person or two or more persons jointly or in concert who make a take-over bid;

 

"regulations' means regulation s made by the Commission pursuant to this Part of this Decree;

 

"take over" means the acquisition by one company of sufficient shares in another company to give the acquiring company control over that other company;

 

"take-over bid" means a bid made for the purpose of a take-over as provided in section 103 of this Decree .

 

(2)     Notwithstanding anything to the contrary contained in any other enactment, every merger, acquisition or business combination between or among companies shall be subject to the prior review and approval of the Commission.

 

(3)     The Commission shall approve any application made under this section if and only if the Commission finds that -

 

(a)     such acquisition, whether directly or indirectly, of the whole or any part of the equity or other share capital or of the w hole or any part of the assets of another company, is not likely to cause a substantial restraint of competition or tend to create a monopoly in any line of business enterprise; or

 

(b)     the use of such share by voting or granting of proxies or otherwise shall not cause a substantial restraint of competition or tend to create a mono poly in any line of business enterprise.

 

(3)     Nothing in this section shall apply to holding companies acquiring shares solely for the purpose of investment and not using same by voting or otherwise to cause or attempt to cause a substantial restraint of competition o r tend to create a monopoly in any line of business enterprise.

 

(4)     Nothing in this section shall apply to transactions duly consummated pursuant to the authority given by any Federal Government owned agency under any statutory provision vesting such power in the agency.

 

(5)     The Commission shall have the power to call for information from companies seeking its approval under this section in order to effectively carry out its functions under this Decree .

 

100.   (1)     Where under a scheme proposed for a compromise, arrangement or reconstruction between two or more companies or the merger of any two or more companies, the whole or any part of the undertaking or the proper y of any company concerned in the scheme (in this section referred to as "the transfer or company" ) is to be transferred to another company, the court may, on the application in summary of any of the companies to be affected, order separate meetings of the companies to be summoned in such manner as the court may direct.

 

(2)     If a majority representing not less than three-quarter in value of the share of members being present and voting either In person or by proxy at each of the separate meetings, agree to the scheme, the scheme shall be referred to the Commission for approval.

 

(3)     If the scheme is approved by the Commission, an application may be made to the court by one or more of the companies, and the court shall sanction the scheme, and when so sanctioned, the same shall become binding on the companies and the court may, by the order sanctioning the scheme or by any subsequent order make provision for all or any of the following matters -

 

(a)     the transfer to the transferee company of the whole or any part of the undertaking and of the property or liabilities of any transferor company;

 

(b)     the allotting or appropriation by the transferee company of any shares, debentures, policies or other like interests in that company which under the compromise or arrangement are to be allotted or appropriated by that company to or for any person -.

 

(c)     the continuation by or against the transferee company of any legal proceedings pending by or against any transferor company;

 

(d)     the dissolution , without win ding up, of an y transferor Company-;

 

(e)     the provision to be made for any persons who in such manner as the court ma y direct, dissent from the compromise or arrangement;

 

(f)     such incidental, consequential and supplemental matters as are necessary to secure that the reconstruction or merger shall be fully an d effectively carried out.

 

(4)     An order under paragraph (d) of sub section (3) of this section shall not be made un less-

 

(a)     the whole of the undertaking and the property, assets and liabilities of the transferor company are being transferred into the transferee company; and

 

(b)     the court is satisfied that adequate provision by way of compensation or otherwise have been made with respect to the employees of the company to be dissolved.

 

(5)     Where an order under this section provides for the transfer of property or liabilities, that property or liabilities shall, by virtue of the order, be transferred to and become the property or liabilities of the transferee company, and in the case of any property, if the order so directs, freed from any charge which is by virtue of the compromise or arrangement to cease to have effect.

 

(6)     Where a n order is made under this section, every company in relation to which the order is made shall cause an office copy thereof to be delivered to the Commission for registration within seven days after the making of the order and a notice of the order shall be published in the Gazette and in- at least one national newspaper and if in default shall he liable to a fine of no t less than N20,000 .

 

(7)     In this section -

 

(a)     "property" includes property rights an d powers of every description ;

 

(b)     "liabilities" includes rights, powers and duties of every description notwithstanding that such rights, powers and duties are of a personal character which could not generally be assigned or performed vicariously;

 

(c)     "company" where used in this section does not include any company other than a company within the meaning of the Companies and Allied Matters Decree 1990.

 

101.   (1)     Where a scheme or contract (not being a take-over bid under this Part of this Decree) involving the transfer of share s or any class of shares in a company (in this section referred to a s "the transferor company') to another company, whether a company within the meaning of this Decree or not (in this section referred to as 'the transferee company';) has, within- four months after the making of the offer in that behalf by the transferee company be en app roved b y the holders of not less than nine -tenths in value of the shares whose transfer is involved (other than shares already held at the date of the offer by, or by a nominee for, the transferee company, or its subsidiary), the transferee comp any may at an y time within two month s after the expiration of the said four months- give notice in the prescribed manner to any dissenting shareholder that it desires to acquire h is shares.

 

(2)     When a notice under subsection (1) of this section is given, the transferee company shall, unless on an application made by the dissenting shareholder within one month from the date on which the notice was given, unless the court thinks fit to order otherwise, be entitled and bound to acquire those shares on the terms on which, under the scheme or contract, the shares of the approving shareholders are to be transferred to the transferee company.

 

(3)     Where shares in the transferor company of the said class or classes as the shares whose transfer is involved are already held as specified in subsection (1) of this section to a value greater than one-tenth of the aggregate of their value and that of the share (other than those already held as specified in the said subsection) whose transfer is Involved, the foregoing provisions of this section shall not apply unless-

 

(a)     the transferee company offers the same terms to all holders of the shares (other than those already held as aforesaid) whose transfer is involved, or where those shares include shares, of different classes, of each class of them; and

 

(b)     the holders who approve the scheme or contracts besides holding not less than nineteenths in value of the shares (other than those already held as aforesaid ) whose transfer is involved, shall not be less than three-quarters in number of the holders of those shares.

 

(4)     Where a notice has been given by the transferee company under subsection (1) of this section and the court has not, on an application made by the dissenting shareholder, ordered to the contrary, the transferee company shall -

 

(a)     on the expiration of one month from the date on which the notice has been given or if an application to the court by the dissenting shareholder is then pending, after that application has be en disposed of, transmit a cop y of the notice to the transferor comp any together with an instrument of transfer executed on behalf of the shareholder by any person appointed by the transferee company and on its behalf by the transferee company;

 

(b)     pay or transfer to the transferor company the amount or other consideration representing the price payable by the transferee company for the shares which by virtue of this section that company is entitled to acquire, and the transferor company shall thereupon register the transferee company as the holder of those shares.

 

(5)     An y sums received b y the transferor company under this section shall be paid into a separate bank account, and any such sums and any other consideration so received shall be held by that company on trust for the several persons entitled to the shares in respect o f which the said sums or other consideration ",ere respectively received.

 

(6)     In this section, "dissenting shareholder" includes a shareholder who has not assented to the scheme or contract and any shareholder who has failed or refused to transfer to the transferee company in accordance with the scheme or contract.

 

102. (1)     This section shall apply where, in pursuance of any such scheme or con tract under section 98 of this Decree, share s in a company a re transferred to another company or its nominee, and those shares together with any other share s in the first- mentioned company held by, or, by a nominee for the transferee company or its subsidiary at the d ate of the transfer comprise or include nine -tenths in value of the shares in the first mentioned company or of an" class of those shares.

 

(2)     The transferee company shall within one month from the date of the transfer (unless on a previous transfer in pursuance of the scheme or con tract it has already complied with this requirement) give notice of that fact in the prescribed manner to the holder of the remaining shares or of the remaining shares of that class, as the case may be, w ho have not assented to the scheme or contract.

 

(3)     Any such holder may, within three months from the giving of the notice to him, require the transferee company to acquire the shares in question .

 

(4)     If a shareholder gives notice under subsection (3) of this section with respect to any shares, the transferee company shall be entitled and bound to acquire those shares on the terms on which under the scheme or contract the shares of the approving shareholders were transferred to it, or on such other terms as may be agreed on as the court hearing the application of either the transferee company or the share holder think s fit.

 

103. (1)     Any bid which constitutes a take-over bid shall be referred to as a bid under the take-over bid.

 

(2)     A takeover bid shall be deemed to be dated as of the d ate on which a bid under the take-over b id is despatched or if such a bid is despatched on more than one date, on the latest d ate on which such a bid is despatched and for this purpose, a bid des patched by post shall be deemed dated as of the date on which it is posted.

 

(3)     For the purposes of this section of this Part, where two or more persons acting separately, or acting separately through one or more than one agent each despatching a bid at approximately the same time to shareholders of the same comp any the y shall, un less the contrary is p roved, b e deem ed to have despatched a b id in concert if those persons so acting are persons com prised in any one of the following groups, namely -

 

(a)     a holding company and its subsidiary or subsidiaries;

 

(b)     two or m ore subsidiaries of the same holding company;

 

(c)     a comp any, and any associate company or companies;

 

(d)     a group of a kind referred to in paragraph (a) or (b) of this subsection together with one or more than one company which is an associate of any company or companies in the group;

 

(e)     a subsidiary and one or more than one associate of the holding company of the subsidiary;

 

(f)     the pension fund of two or mo re companies in any group of a kind referred to in paragraphs (a) to (e) of this sub-section; or

 

(g)     any combination of -

 

(i)     officers o f one or m ore than one company in any group of a kin d referred to in paragraphs (a) to (e) of this sub section,

 

(ii)     members of the family or families of any such officer or officers, or

 

(iii)     any such officer o r officers an d any such member or members, an d for this purpose, the family of an officer includes a person (not being an officer) who is the husband or wife (including the reputed husband or wife, a child or the parents, of the officer.

 

(4)     Where the shares in a company are not divided into two or more classes those shares shall, for the purposes of this Decree , be deem ed to constitute a class .

 

104.    (1)     Subject to this section, a take-over bid shall be deemed to be made by a person who, either himself or through his agent, despatches a bid; or by two or more persons jointly or in concert who either themselves, or through their agent dispatch a b id to shareholders at approximately, the same time in order to acquire -

 

(a)     shares of any class in an offeree company which -

 

(i)     either alone, or

 

(ii)     if combined with share s of that class in the offeree company already, o n the date of the take- over bid, beneficially owned or controlled directly or indirectly, by that person or any of them or any company belonging to the same group as that person or, as the case ma y be, those persons or an y of them , or any company belonging to the same group as that person or, a the case may be, those persons or any of them, would exceed one-third in number of the issued shares included in that class; or

 

(b)     sufficient shares in the offeree company to make that company the subsidiary of that person or, as the case may be, of any of those persons, or

 

(c)     sufficient shares in the offeree company to enable that person or, as the case may be , those persons or any of them to exercise or to control the exercise of not less than one-third of the voting power at any general meeting of the offeree company.

 

(2)     Subject to this section, a take-over bid shall he deemed to be made by a company which either by itself or through its agent, despatches a bid to its shareholders at approximately the same time in order to re-purchase the company's own shares.

 

(3)     A take-over bid shall not be made in any ca se where a bid is despatched -

 

(a)     to fewer than twenty shareholders or such other number as may be prescribed by regulations, in order to purchase shares b y way of separate agreements;

 

(b)     to purchase shares in a company which has fewer than twenty or such other number as may be prescribed in the regulations; two or more persons who are joint shareholders being counted as one share holder; or

 

(c)     in circumstances or for a purpose prescribed by regulations.

 

(4)     A take-over bid shall not be made in any case where the shares to be acquired under a bid are shares in a private company.

 

105.  (1)    Subject to subsection (8) of this section, no person o r no two or more person s jointly or in concert, shall make a take-over b id unless an authority to proceed with the take-over b id has been granted under this section and is in force at the date of the take-over bid.

 

(2)     An application for an authority to proceed with a take-over bid shall -

 

(a)     be made to the Commission by or on behalf of the person or persons proposing to make the bid;

 

(b)     give the name and other particulars of that person or those persons; and

 

(c)     give particulars of the proposed bid and contain such information and be accompanied by documents or reports of such a kind as m ay be prescribed by regulations.

 

(3)     The Commission may require the person or persons making an application to furnish it with such further information as it reasonably considers necessary to enable it make a decision on the application and that person or those persons shall, if it is in their power to do so, give the information to the Commission.

 

(4)     The Commission may consult with such persons as it deems necessary in order to make a decision on an application.

 

(5)     Except as may be necessary for the purpose of any consultation pursuant to subsection (1) of this section, the Commission shall keep confidential the contents of an application, any document or report accompanying an application and any in formation g iven pursua nt to subsection (3) pf this section.

 

(6)     For the purpose of deciding whether or not to grant an authority to proceed with a take-over bid, the Commission shall have regard only to the likely effect of the take-over bid if successfully made -

 

(a)     on the economy of Nigeria;

 

(b)     on an y policy of the Federal Government with respect to manpower and development, and if the Commission is satisfied that none of the matters referred to in paragraphs (a) and (b) of this subsection would be adversely affected, it shall grant an authority to proceed with the pro posed take-over bid, but if no t so satisfied it shall refuse so to d o.

 

(7)     An authority to proceed with a proposed take-over bid shall be -

 

(a)     in writing sign ed by, or on behalf of the Commission ;

 

(b)     dated and give sufficient particulars of the proposed take-over bid to enable it to be identified.

 

(8)     An authority to proceed with a take-over bid shall remain in force -

 

(a)     for the period of three months following the date of the authority; or

 

(b)     for such longer period as the Commission may, on application made to it before the expiration of the period referred to in paragraph (a) of this sub section, allow.

 

106.  (1)    Subject to sub section (6) of this section, no person, or two or m ore person s jointly or in concert shall make a take-over bid unless a copy of any bid which it is proposed to despatch under the take-over bid, signed by or on behalf of that person or , as the case may b e, each o f those persons, has been registered under this section.

 

(2)     A copy of a proposed bid required under subsection (1) of this section to 'be registered shall be lodged with the Commission and -

 

(a)     if the Commission is satisfied that the proposed bid meets the requirements of subsection (1) or (2) of section 104 of this Decree shall, subject to subsection (6) of this section, register the copy; and

 

(b)     if the Commission is not so satisfied, shall refuse to register the copy, and in either event, the Com mission shall inform the person , or each person who signed the copy or on whose behalf the copy was -signed, by a notice served on him, at an address provided by the person when the copy was lodged, that it has registered or, as the case may be, not registered the copy giving, in the latter case in the notice, its reasons for not doing so.

 

(3)     Within thirty days after the service on him of a notice under subsection (2) of this section, a person may by notice in writing require the Commission to refer the fact of its refusal to register a copy of a propos ed bid to the court, and the Commission shall do so; but only one reference shall be made notwithstanding that such a notice is served on more than one person and all or an y of those persons require a reference to be made.

 

(4)     The court may, after hearing a reference under subsection (3) of this section, either order the Commission to register the copy of the proposed bid and the Commission shall do so, or uphold the decision of the Commission in which case the copy o f the proposed bid shall not b e registered.

 

(5)     The fact that the Commission registers a copy of a proposed bid may not he relied on in any proceedings by any person as a representation that the bid satisfies the requirements of subsection (1) or (2) of section 104 of this Decree.

 

(6)     The Commission shall not register a copy of a proposed bid unless, where required, an authority to proceed with the take- over bid W been granted under section 105 of this Decree and is then in force.

 

107.  (1)   A bid, being an invitation, under a take-over b id shall be incorporated in a document that -

 

(a)     states the name and address of the offeror or, where two or more persons constitute the offeror, each offeror, and in the case of an offeror that is a corporation, a statement of the date on which the approval of the director s of the corporation was given pursuant to subsection (1 ) section 108 of this Decree .

 

(b)     specifies the maximum number and other particulars of the shares in the offeree company proposed to b e acquired now during a period specified in the invitation;

 

(c)     specifies the term s on which those shares a re proposed to be acquired ;

 

(d)     specifies the number and other particulars of the shares in the offeree company to which -

 

(i)     the offeror, and

 

(ii)     any company in the same group of companies as the offeror or any one of the offerors, is or are entitled immediately before the date of the take- over bid; (e) states, if applicable, the matter required to be stated by paragraph (c) of section 113 of this Decree or paragraph (e) of section 115 of this Decree; and

 

(f)     specifies or sets out such other matters as may be prescribed by regulations to be included in the invitation.

 

(2)     A bid, being an offer, under a take-over bid shall be incorporated in a document that -

 

(a)     states or specifies the matter referred to in subsection (1)(a) and (d) of this section;

 

(b)     specifies the number and other particulars of the shares in the offeree company proposed to be acquired during a period specified in the offer;

 

(c)     specifies the term s of the offer in respect of those shares;

 

(d)     sets out how and by w hat date the obligations of the offeror are to be satisfied;

 

(e)     sets out all other particulars of the offer;

 

(f)     states, if applicable, the matter required to be stated by paragraph (e) of section 113 of this Decree or paragraph (e) of section 115 of this Decree; and

 

(g)     species or sets out such other matters as may be prescribed by regulations to be included in an offer.

 

108.  (1)    A corporation shall not make a take-over bid, either alone or with any other person, unless the making of the take-over bid has be en approved by a resolution of the director s of the corporation.

 

(2)     If default is made in com plying with the provisions of subsection (1) o f this section, each director in default commits an offence and is liable on conviction to a fine of not less than N100,000 or to imprisonment for a term not exceeding twelve month s or to both such fine and imprisonment.

 

109.    A bid under a take-over bid, and any amendment of such a bid, shall be despatched by the offeror concurrently to -

 

(a)     each director of the offeree company;

 

(b)     each shareholder of the offeree company; and

 

(c)     the Commission.

 

110.   Where a bid under a take-over bid states that the consideration for the shares deposited pursuant to the bid is to be paid in money or partly in money, the offeror shall make adequate arrangements to ensure that funds are available to make the required money payment for those shares.

 

111.   (1)   Where, under section 109 of this Decree, a bid under a take-over bid is despatched to each of the directors of an offeree company, the directors shall send a directors' circular to each shareholder of the offeree company an d to the Commission at least seven days before the date on which the take-over bid, whichever is the earlier is to take effect.

 

(2)     Unless the directors of a n offeree company send a director s' circular as required by subsection (1) of this section within ten days of the date of a take-over bid, the directors shall forthwith notify the shareholders and the Commission that a directors' circular shall be sent to them, and may recommend that no shares be tendered pursuant to the take-over b id until the directors' circular is sent.

 

(3)     The notice required by subsection (2) of this section shall be in the form prescribed b y regulations.

 

(4)     Where a director of an offeree company is of the opinion that a take-over-bid is not advantageous to the shareholders of the offeree company, or where a director disagrees with any statement in a directors' circular, he shall be entitled to indicate his opinion or disagreement in the directors' circular requiring his opinion or disagreement, he shall include in the circular a statement setting out the reasons for his opinion or disagreement.

 

(5)     The directors of an offeree company shall approve a directors' circular which contains the recommendations of a majority of them, and the approval shall be evidenced by the signature of one or more than on e director.

 

(6)     A directors' circular shall include particulars of any payment made to an officer or former officer of an offeree company by way of compensation for loss of his office, or of any office in connection with the management of the company's affairs, or of any office in connection with the management of any subsidiary of the comp any, or as consideration for or in connection with his retirement from an y office.

 

112.  (1)     A bid under a take-over bid or a director s' circular shall not include a rep ort, opinion or statement of a legal practitioner, auditor, accountant, engineer, appraiser or other expert unless that person has consented in writing to the inclusion of the rep ort, opinion or statement in the bid or circular.

 

(2)     Up on the demand of the Commission, a person referred to in subsection (1) of this section, shall forthwith send to the Commission a copy of any report, opinion or statement referred to in that subsection which is made by that person and included in a bid o r directors' circular, tog ether with h is consent to its inclusion.

 

113.     Where a bid under a take-over bid is for all the shares of a class in an offeree company -

 

(a)     shares deposited pursuant to the bid, if not taken up by the offeror, may be withdrawn by or on behalf of a shareholder in the offeree company at any time after sixty days following the date of the take-over bid;

 

(b)     the offeror shall not take up shares deposited pursuant to the bid until ten days after the date of the take-over bid; and

 

(c)     the offeror, if he so intends, shall state in the bid that he intends to invoke the right under section 114 of this Decree to acquire the shares of shareholders-of the offeree company who do not accept the bid and that the shareholder is entitled to dissent and to demand the fair value of his shares.

 

114.   (1)   W here a bid under a take-over bid is for less than all the shares of any class in the offeree company -

 

(a)     the offeror shall not take up shares deposited pursuant to the bid until twenty-one days after the date of the take-over bid,

 

(b)     the period of time within which shares may be deposited pursuant to the bid, or any extension thereof, shall not exceed thirty-five days from the date of the take-over bid; and

 

(c)     if a greater number of shares is deposited pursuant to the bid than the offeror is bound or willing to take up and pay for, the shares taken up by the offeror shall be taken up rateably, disregarding fractions, according to the number of share s deposited by e ach shareholder.

 

(2)     Where a bid under a take-over bid for all the shares of any class in the offeree company is converted by amendment or otherwise to a bid for less than all those shares, the bid shall be deemed to be a bid to which subsection (1) of this section app lies.

 

115.   Where a bid under a take-over bid is for all or less than all, the shares of any class in the offeree company -

 

(a)     shares deposited pursuant to the bid may be withdrawn by or on behalf of a shareholder in the offeree company at an y time within ten days after the date of the take-over bid;

 

(b)     shares deposited pursuant to the bid shall, if the terms stipulated by the offeror and not subsequently waived b y him have bee n com plied with, be taken up and paid for within fourteen day s after the last day within which shares may b e deposited pursuant to the bid;

 

(c)     the period of time which shares may be deposited pursuant to a bid shall be less than twenty-one days after the d ate of the take-over bid;

 

(d)     if the terms of the bid are amend ed by increasing the consideration offered for the shares, the offeror shall pay the increased consideration to each shareholder whose shares are taken up pursuant to the bid, whether or not the shares have been taken up before the amendment;

 

(e)     if the offeror intends to purchase shares in the offeree company in the market during the period of time within which shares may be deposited pursuant to the bid, the offeror shall so state in the bid; and (f) if the offeror purchases shares to which a b id related otherwise than pursuant to the bid during the period of time within which shares may be deposited pursuant to the bid -

 

(i)     the payment otherwise than pursuant to the bid of an amount for a share that is greater than the amount offered in the bid shall be deemed to be an amendment of the bid to which paragraph (d) of this sub section applies,

 

(ii)     the offeror shall immediately notify the shareholders in the offeree company, as provided under section 107 of this Decree as to the increased consideration being offered for the shares,

 

(iii)     the shares acquired otherwise than pursuant to nether a the bid shall he counted to determine whether a condition as to minimum acceptance has been fulfilled, and

 

(iv)     the shares acquired otherwise than pursuant to the bid shall not be counted among the shares taken up rateably under paragraph (c) of subsection (1) of section 114 of this Decree.

 

116.   Where a take-over bid is made in relation to any company the Commission shall cause to be placed on the file of the offeree company -

 

(a)     any bid or amendment received by it pursuant w section 109 of this Decree; and

 

(b)     any directors' circular received by it pursuant to section 111 of this Decree .

 

117.    (1)   For the purposes of this section -

 

(a)     where a take-over bid has been made, in respect of all the shares included in a class of shares (other than shares to which the offeror or, where two or more persons constitute the offeror. any of those persons, or any company belonging to the same group of companies as that person or any of those persons, is entitled), the shares in respect of which that take-over offer was made shall be "Shares subject to acquisitions;

 

(b)     "outstanding shares' means shares subject to acquisition in respect of which a take-over bid was made but has not ban accepted; and

 

(c)     a "dissenting offeree" means a person who is, or is entitled to be registered as a holder of outstanding shares.

 

(2)     Where a take-over bid in respect of shares included in the class of shares referred to in paragraph (a) of subsection (1) of this section representing not less than ninety percent in number of shares subject to acquisition has been accepted, the offeror may, within one month after the date on which acceptance of the shares representing not less than that per cent is completed, give notice as prescribed to a dissenting offeree-

 

(a)     to the effect that the take-over b id has been accepted as mentioned in this section;

 

(b)     that the offeror is bound to take up and pay for or has taken up and paid for, shares of the offerees w ho accepted the take-over bid;

 

(e)     informing the dissenting offeree as to the election which he is required to make under subsection (3) of this section giving particulars of that election; and

 

(d)     informing the dissenting offeree as to the effect of sub section (4 ) of this section and as to the requirements of subsection (5) of this section, giving particulars in each case.

 

(3)     A dissenting offeree may, within twenty days of receiving a notice under subsection (2) of this section, by notice sent to the offeror elect -

 

(a)     to transfer his shares to the offeror on the terms on which the offeror acquired the shares of the offeree who accepted the take-over bid; or

 

(b)     to demand payment-of the fair value of his shares in accordance with section 118 of this Decree.

 

(4)     A dissenting Offeree to whom a notice is given under subsection (2) of this section, who does not make any election as required by subsection (3) of this section, shall be deemed to have made an election under paragraph (a) of that subsection.

 

(5)     A dissenting offeree shall, within twenty days after receiving a notice sent under subsection (2) of this section, send to the offeree company his share certificate of the class o f shares to which the take-over bid relates.

 

(6)     An offeror shall, within twenty days after he sends a notice under subsection (2) of this section to a dissenting offeree, pay or transfer to the offeree company the amount of money or other -consideration that the offeror would have to pay if the dissenting offeree made an election under paragraph (a) of sub section (3 ) of this section, and the offeree company-

 

(a)     shall be deemed to hold that amount of money or consideration in trust for the dissenting offeree; and

 

(b)     shall -

 

(i)     pay the amount into a bank account established for the purpose, or

 

(ii)     place the consideration in the custody of a ban k.

 

(7)     An offeror shall -

 

(a)     send to the offeree company a copy of every notice sent under sub section (3 ) of this section to a dissenting offeree, and

 

(b)     notify the offeree company of the election made by a dissenting offeree under subsection (3) of this section or deemed to have been made under subsection (4) by a dissenting offeree.

 

(8)    An offeror shall send to the Commission a copy of every notice sent under subsection (2) of this section, to a dissenting offeree not later than one month after the date on which it is so sent.

 

118.   This section shall apply where a dissenting offeree makes an election under paragraph (b) of subsection (3) of section 117 of " Decree .

 

(2)     The offeror may, within twenty days after he had paid the money or transferred the other consideration under sub section (6) of this section apply to the court to fix the fair value of the shares of the dissenting offeree.

 

(3)     If an offeror fails to apply to the court under subsection (2) of this section , a dissenting offeree may apply to the court for the same purpose within a further period o f twenty days.

 

(4)     A dissenting offeree shall not be required to give security for costs in an application made under subsection (2) or (3) of this section.

 

(5)     Where a n application is made under subsection (2) or (3) of this section -

 

(a)     all dissenting offerees who made an election under paragraph (b) of subsection (3) of section 1 17 of this Decree shall b e joined as parties and bound by the decision of the court: and

 

(b)     the offeror shall notify each affected dissenting offeree of the date and place of the application an d of his right to app ear and b e heard in person or by counsel.

 

(6)     Upon an application to the court under subsection (2) or (3) of " section, the court shall fix a fair value for the shares of all dissenting offerees who made an election under paragraph (b) of subsection (3) of section 117 of this Decree .

 

(7)    The court may, in its discretion, appoint one or more than one valuer to assist the court in fixing a fair value for the shares o f a dissenting offeree.

 

(8)     The final order of the court shall be made against the offeror in favour of each dissenting offeree who made an election under paragraph (b) of sub section (3 ) of section 117 o f this Decree an d for the amount for his shares a s fixed by the court.

 

(9)     The court may, in connection with proceedings under this section, make an order it thinks fit and, without limiting the generality of the foregoing may -

 

(a)     by order, fix the amount of money or other consideration that is required to be held in trust under sub section (6) of section 117 of this Decree;

 

(b)     order that money or other consideration be held in trust by a person other than the offeree company; or

 

(c)     allow interest at the current bank rate on the amount payable to each dissenting offeree from the date he sends to the offeree company his share certificates under subsection (5) of section 117 of this Decree until the date of payment.

 

(10)    Where the amount of money or other consideration fixed by the court under paragraph (a) of subsection (9) of this section exceeds that held on trust pursuant to any payment or transfer already made under subsection (6) of section 117 of this Decree b y the offeror, the offeror shall -

 

(a)     make to the offeree company any payment or transfer necessary to comply with the order, and sub section (6 ) of section 117 o f this Decree shall apply in relation to the amount so p aid or transferred, or

 

(b)     if the court made an order under paragraph (b) of subsection (9) of this section, make that payment or transfer to the other person by whom the money or consideration is to be held in trust.

 

(11)    Where the court makes an order under paragraph (b) of subsection (9) of this section-

 

(a)     the order of the court shall operate to divest the offeree company of the money or other consideration subject to the trust and to vest it in the person named in the order on the like trust; and

 

(b)     subsection (6) of section 117 of this Decree shall apply to money or other consideration paid or transferred pursuant to paragraph (b) of sub section (1) of this section to that person .

 

119.   (1)   W here an offeree company is satisfied -

 

(a)     in the case of the dissenting offeree who makes an election under paragraph (a) of subsection (3) of section 117 of this Decree or is deemed to have made such an election, that the offerer has made the payment or transfer required by subsection (6) of section 11 7 of this Decree; and

 

(b)     in the case of a dissenting offeree who made an election under paragraph (b) of subsection (3) of section 117 of this Decree, that the offeror has, in addition to making that payment or transfer, made any payment or transfer required under subsection (1) of section 118 of " Decree to be made by the offeror, the offeree company shall issue to the offeror a share certificate in respect of the shares that were held by the dissenting offeree.

 

(2)     W here an offeree company is satisfied a s provide d in paragraph (a) or (b ) of subsection (1) of this section , it shall -

 

(a)     in the case of a dissenting offeree who has complied with subsection (5) of section 117 of this Decree, give to the dissenting offeree the money or other consideration to which he is entitled on application being made by him for that purpose or, if an order is made under paragraph (b) of subsection (9) of section 118 of this Decree, notify the other person holding the money or the property in trust that the dissenting offeree has complied with subsection (5) of section 117 of this Decree; or

 

(b)     in the case of a dissenting offeree who has not complied with subsection (5) of section 117 of this Decree, send to the dissenting offeree a notice stating that -

 

(i)     his shares have been cancelled;

 

(ii)     a payment or transfer has been made under subsection (6 ) of section 117 of this Decree or as the case may be, under subsection (6) of section 118 of this Decree and subsection (10) thereof, giving particulars; and

 

(iii)     the offeree company shall give or, as the case may be, authorise any person holding money or property in trust pursuant to an order made under paragraph (b) of subsection (9) of section 118 of " Decree to give to the dissenting offeree the money or other consideration, to which he is entitled, when he complies with subsection (6 ) of section 117 of this Decree .

 

(3)     A person holding money or property in trust pursuant to an order made under paragraph (b) of subsection (9) of section 119 of this Decree shall, when he has been notified as provided in paragraph (a) of subsection (2) of this section or given authority as provided in subsection (2)(b)(iii) of this section, give to a dissenting offeree the money o r other consideration to which he is entitled on application being mad e by him for that purpose.

 

120.   (1)  In this section, 'trustee' means - a n offeree company or an y person who heads money or property in trust pursuant to an order made under paragraph (b) of subsection (9) of section 118 of this Decree.

 

(2)     A trustee shall not be required to give money or other consideration to a person applying for it under section 119 of this Decree unless h e is satisfied that person is entitled to it.

 

(3)     The court ma y -

 

(a)     on the application of any person, direct that the person is or is not a person entitled under section 119 of this Decree to any money or other consideration; or

 

(b)     on the application of a trustee, direct that any money or other consideration held by the trustee an d in respect of which no application has bee n mad e under section 1 19 of Decree in the period of three years after the nomination of the take-over concerned, be paid or transferred to, and held by the Commission; and in that event a claim by a person claiming to be entitled to the money or consideration shall be made to the Com mission.

 

121.  (1)   The following subsection s shall have effect when the aggregate n umber o f -

 

(a)     shares included in a class of shares in an offeree company to which the offeror or, where two or m ore persons constitute the offeror, any of those persons become entitled in consequence of a take-over bid; and

 

(b)     any other shares included in that class to which the offeror or, where two or more persons constitute the offeror, any of those persons, or any company belonging to the same -group of companies as that person or any of those persons, was entitled before -any bid under the take- over b id was despatched, is not less than ninety per cent o f the issued share s included in that class.

 

(2)     The offeror s hall, within two month s after the d ate on which the aggregate number of shares referred to in paragraphs (a) an d (b) of subsection (1) of this section becomes not less than ninety per cent of the shares last mentioned in that subsection, give notice of that fact to the holders of the remaining shares included in that class who when the notice is given had not been given notice under subsection (2) of section 117 of this Decree.

 

(3)     A holder of the remaining shares referred to in subsection (2) of this section may, within two months after the giving of notice to him under that subsection, require the offeror to acquire shares included in that class of which he is the holder.

 

(4)     Where a shareholder gives notice under subsection (3) of this section with respect to his shares, the offeror shall be entitled and bound to acquire those shares -

 

(a)     on the terms on which shares were acquired under the take-over bid; or

 

(b)     on such terms as are agreed or as the court, on the application of the offeror or the shareholder, thinks fit to order.

 

(5)     In determining, for the purposes of paragraph (a) of subsection (4) of this section, the terms on which shares are acquired under a take -over bid, the terms on which the shares of any dissenting offeree we re acquired shall be ignored.

 

122.  (1)   W here a person or two or m ore persons make s or make a take-over bid -

 

(a)     to which section 105 of this Decree applies and no authority to proceed with the takeover bid granted under that section is in force on the date of the take-over bid, or

 

(b)     to which section 106 of this Decree applies-an d a copy of a bid under the take-over bid has not bee n registered under that section, that person or each of those persons commits an offence and is liable on conviction to a fine of not less than N100,00 0 or to imprisonment for a term no t exceeding twelve months or to both such fine and imprisonment.

 

(2)     W here a person o r more than on e person make s or make a take -over b id and a bid under the take-over b id

does not comply -

 

(a)     in the case of an invitation , with requirements of sub section (1 ) of section 107 o f this Decree; or

 

(b)     in the case of a n offer, with the requirements of sub section (2 ) of section 107 o f this Decree, that person or each of those persons commits an offence and is liable on conviction to a fine of not less than N100 ,000 or to imprisonment for a term not exceeding twelve months or to both such fine and imprisonment.

 

(3)     W here a report, an opinion or a statement refer red to in subsection (1) of section 11 2 of this Decree is included contrary to that subsection -

 

(a)     in a bid under a take-over bid, the offeror or each offeror commits an offence; or

 

(b)     in a director s' circular, each of the directors is guilty of an offence, and liable on conviction to a fine of not less than N100,000 or to imprisonment for a term not exceeding twelve months or to both such fine an d imprisonment.

 

(4)     Any person who fails to comply with a demand made by the Commission under subsection (2) of section 112 of this Decree as required by that subsection commits an offence and is liable on conviction to a fine of not less than N100,000 or to imprisonment for a term not exceeding twelve months or to both such fine and imprisonment.

 

(5)     Where an offeree under any provision of this section (except paragraph (b) of subsection (3) of this section) is committed by a body corporate every director of the body corporate in default shall be deemed to have committed an offence and liable on conviction to a fine of not less than N100,000 or to imprisonment for a term not less than twelve months or to both such fine an d imprisonment.

 

 

Part XI

Collective Investment Schemes

 

123.  (1)     In this Decree and subject to this section, a "Collective Investment Scheme" means -

 

(a)     any arrangement with respect to property of any description, including money, the purpose or effect of which is to enable persons taking part in the arrangements (whether by becoming owners of the property or any part of it or otherwise) to participate in or receive profits or income arising from the acquisition, holding, management or disposal of the property or sums paid out of such profits or income,

 

(b)     any arrangement describe d in paragraph (a) of this subsection in which the participants do not have day to day control over the management of the property underlying the arrangement notwithstanding that they have a right to be consulted or to give directives,

 

(c)     any arrangement a s set out in paragraph (a) or (b) of this subsection in which participants pool their contributions for the purpose of sharing the profits or income arising from the management of their money o r property solely from the efforts o f a third party.

 

(2)     Where any arrangement provide for such pooling a s is mentioned in paragraph (c) of subsection (1) o f this section in relation to separate parts of the property, the arrangement shall not be regarded as constituting a single collective investment scheme unless the participants are entitled to exchange rights in one part for rights in another.

 

(3)     The following are not collective investment schemes -

 

(a)     arrangements operated by a person other wise than b y way of business,

 

(b)     arrangements where each of the participants carries on a business other than investment business an d enters into the arrangements for. commercial purpose related to that business;

 

(c)     arrangements where each of the participants is a body corporate, in the same group as the operator;

 

124.     In this Part-

 

"auditor" means a member of a body of accountants, from time to time, recognised by an Act or Decree or any other enactment and appointed as auditor of the trust by managers with the approval of the trustees;

 

"authorised unit trust scheme" means any unit trust scheme which is authorised by the Commission and registered in the register maintained by the Commission for the purpose of this Part;

 

"dealing in securities" means doing any of the following things (whether as a principal or as an agent), that is, making or offering to make with an y person , or inducing or attempting to induce any person to enter into or offer to enter into any agreement for or with a view to acquiring, holding or disposing of securities or any other property, or any agreement the purpose or pretended purpose of which is to secure a profit to any of the parties from the yield of securities or by reference to fluctuations in the value of securities;

 

"filing" means delivery to the Commission through mails or otherwise of all papers or applications required to be filed with the Commission pursuant to this Decree and regulations made thereunder, and the date on which the paper s or application s are actually received by the Commission at its principal office shall be the date of filing the papers or applications;

 

"holder" means any investor or beneficiary who has acquired units of the unit trust scheme and trust deed, and is entitled to a pro rata share of dividends, 'interest or other income of he securities comprised in the unit;

 

"issuer" means the person performing the duties of a manager pursuant to the provisions of the trust under which the u nits are issued;

 

"manager" under a unit trust scheme means the person in whom are vested the powers of management relating to property for the time being subject to any trust created in pursuance of the scheme;

 

"prospectus" includes offer for sale, advertisement, circular, letter, notice, scheme of arrangement, or other equivalent document published or circulated relating to the unit trust scheme;

 

"register" means the register established an d maintain ed for the purposes of this Part;

 

"trust deed" means the agreement drawn up between the trustees and the manager for

regulating the operation of a u nit trust scheme ;

 

"trustee" under a unit trust scheme means the person in whom the property for the time being subject to any trust created in pursuance of the scheme is or may be vested in accordance with the term s of the trust;

 

"units" in relation to a unit trust scheme, means any units (described whether as units or otherwise into which are divided the beneficial interest in the assets subject to any trust created under the scheme:

 

"unit trust scheme" or 'mutual fund' means any arrangement made for the purpose, or having the effect, of providing facilities for the participation of the public as beneficiaries under a trust in profits or income arising from acquisition, holding, management or disposal of securities or any other property whatsoever.

 

125.  (1)  Notwithstanding anything contained in this Decree, no person shall establish or operate a unit trust scheme or carry on or purport to carry on the business of dealing in units of a trust scheme (described whether as units or other wise) unless such scheme is authorised b y and registered with the Commission .

 

(2)     An application for authorisation under this section shall be in the form prescribed by the Commission and shall be accompanied by such documents as may be specified, from time to time, by the Commission.

 

(3)     Upon application to the Commission in accordance with this Decree b y the manager under a unit trust scheme, the Com mission may authorise and register if but only if-

 

(a)     the Commission is satisfied that the competence in respect of matters of the kin d with which they would be concerned in relation to a unit trust scheme and probity of the manager and trustee are such as to render them suitable to act as manager an d trustee respectively under the scheme,

 

(b)     the manager under the scheme is a body corporate which is incorporated under the Companies and Allied Matters Decree 1990 and having a minimum paid-up capital of N20,0 00,000 ;

 

(c)     the trustee under the scheme is a body corporate such as a bank or an insurance company licensed under the Insurance Decree 1997 having a minimum paid up capital of N40,000.000;

 

(d)     the Commission is satisfied that the scheme is such that the effective control of the affairs of the scheme is vested in the manager and is exercised independently of the company which is the trustee under the scheme;

 

(c)     the Commission is satisfied that the trust deed is in compliance with the provisions of this Decree and the rules and regulations for the time being in force thereunder; and a copy of the trust deed aforesaid is deposited with the Commission: and

 

(f)     the name of the scheme is not, in the opinion of Commission, undesirable.

 

(4)     The Com mission may re fuse to authorise a un it trust scheme if it fails to com ply with the provisions of this Pan of this Decree and shall so notify the manager and the trustee under the scheme stating its reasons for refusal within thirty days of such refusal.

 

(5)     Upon authorisation of a unit trust scheme, the Com mission shall certify that the scheme is so authorised.

 

126.  (1)     It shall not be lawful for any person, directly or indirectly to deal in units of a trust scheme (described whether as units or otherwise) unless such units have been duly registered with the Commission .

 

(2)     A unit may be registered pursuant to this Decree by the issuer filing an application with the Commission in accordance with the provisions of this Part of this Decree and the rule s and regulations thereunder.

 

(3)     Any application for registration of units filed pursuant to this section shall become effective o n the sixtieth day after filing thereof or such earlier date as the Commission may determine having due regard to the adequacy of the information contain ed in such application and registration shall be deemed effective only as to the units specified therein a s proposed to be offered.

 

(4)     The Commission shall establish and maintain a register of units and un it trust schemes (in this Part of this Decree referred to as the "register').

 

127. (1)    It shall not be lawful for any manager or trustee under a unit trust scheme to make any alteration in the deed in which are expressed the trusts of an authorised scheme or to make any change in the name of an authorised scheme without prior approval of the Commission.

 

(2)     Where the manager or trustee under a unit trust scheme fails to comply with subsection (1) of this section, he commits an offence and is liable on conviction to a fine of N50,000 and in addition to a penalty of N5,000 per day for the period during which the default subsists.

 

128. (1)     Subject to the provisions of this section, Commission may revoke the authorisation of a scheme if -

 

(a)     there is a contravention of any provision of this Part of " Decree or of any rule or regulation made thereunder; or

 

(b)     there is a contravention of any of the conditions specified in subsection (3)(b), (c) and (e) of section 125 of this Part of this Decree; or

 

(c)     the Commission is no longer satisfied in respect of the matter specified in sub-section (3)(a), (d) and (f) of section 125 of this Part of this Decree-, or

 

(d)     the interest of the holders of un its created under the scheme so requires.

 

(2)     The Commission shall before such revocation -

 

(a)     notify the manager and the trustee under the scheme and the manager and trustee may within twenty-on e days fro m the d ate of such notification make representations in writing to the Com mission in respect of the proposed revocation ;

 

(b)     consider any representation duly made by the manager an d trustee under the scheme.

 

(3)     The Commission shall communicate its decision to revoke its authorisation of the un it trust scheme within thirty days after the making of the representations or if none are made within thirty days after the last day for making of the representations under this section.

 

129.  (1)   Any letter, notice, circular or document prepare d by the manager for the purpose of offering units of a unit trust scheme to the public shall be approved by the trustee and submitted to the Commission for approval before such letter, notice circular or document is published.

 

(2)     There shall be included in a document of the kind referred to in subjection (1) of this section, information in relation to such matters (if any) as may be specified, from time to time, by the Commission .

 

130.  (1)   Any manager under a unit trust scheme who offers or sells by means of a letter, notice, circular, document or oral communication which includes an untrue statement of a material fact or omits to state a material fact necessary in order to make the statements, in the 1ight of the circumstances under which they were made, not misleading (the purchaser not knowing of such untruth or omission and who shall not sustain the burden of proof that he did not know, and in the exercise of reasonable care could not have known, of such untruth or omission), is liable to the person purchasing such units who may bring an action before the Investments and Securities Tribunal established under this Decree (in this Decree referred to a s 'the Tribunal') to recover the consideration p aid for such un its, or for damages if he no longer owns the units.

 

(2)     No action shall be maintained to enforce any liability under subsection (1) of this section, unless brought within two years after discovery of the untrue statement or after such discovery ought to have been made by the exercise of reason able care.

 

131.  (1)   Whenever the holder of units of an authorized unit trust scheme so requests, the manager under the scheme, shall, within the time specified by the Commission, buy from the holder such number of those units as the holder m ay specify at the pr ice for the time being at which the manager buys un its of the scheme .

 

(2)     Whenever the authorisation of a unit trust scheme under this Decree stands revoked, the manager under the unit true scheme shall buy all the units under the scheme at the price for the time being at which the manager buys units of the scheme.

 

132.  (1)  No company that is a manager under a unit trust scheme or is a subsidiary or holding company of the manager or a director or a person engaged in the management of such a company shall carry out transactions for itself or himself, or make a profit for itself or himself, or make a profit for itself or himself from a transaction in any assets held under the scheme.

 

(2)     A company that is a manager under a unit trust scheme or is a subsidiary or holding company of the manager shall not -

 

(a)     borrow money on behalf of the scheme for the purpose of acquiring securities or other property forth e Scheme;

 

(b)     lend money that is subject to the trusts of the scheme to a person to en able him to purchase users of the scheme; or

 

(c)     mortgage o r charge or impose any other en cumbrance o n any securities or other property subject to the trust of scheme; or

 

(d)     engage in any transactions that are not in the interest of un it holders and of the scheme.

 

(3)     Any person who contravenes the pro visions of this section commits an offence and is liable on conviction to a fine of not less than equal the amount of profits made from any such transaction or to a fine of N20,000 whichever is higher.

 

133.   Any provision in the trust deed in which are ex pressed the trusts created in pursuance of an authorised unit trust scheme shall be void in so far as it would have the effect of exempting the -trustee under the scheme from or indemnifying it against liability for breach of trust where, having regard to the provisions of the trust deed conferring on him an y powers, authorities or discretion, he fails to exercise the degree of care and diligence required of him as trustee.

 

134.  (1)   The manager of an authorised unit trust scheme shall cause proper books of account to be kept and annual accounts to be prepared which shall give a fair and true view of the affairs of the scheme during each year covered by the accounts and the accounts shall be audited by a person appointed as auditor by the manager under the scheme with the consent of the trustee under the scheme.

 

(2)     A copy of the auditors' report on the accounts and of such account certified by an auditor shall be sent by the manager to the Commission and also published in national newspapers within three months after the end of the period to which the accounts relate or as the Com mission m ay, from time to time, specify.

 

(3)     The auditor shall certify that the unit trust scheme has been operated within - the provisions of this Decree and the regulations prescribed by the Commission.

 

(4)     The manager under the scheme shall call an annual general meeting of unit holders with the consent of the trustee not later than four months after each year to consider the accounts and other matters affecting the scheme.

 

(5)     An extraordinary general meeting of the unit holders m ay be convened-

 

(a)     by the manager with the consent of the trustee; or.

 

(b)     at the request of the trustees; or

 

(c)     by a requisition of twenty-five percent of the unit holders; or

 

(d)     by the court on application by a member where the court is satisfied that it is just and equitable so to do .

 

135.  The calculation of prices at which un its of any u nit trust scheme m ay be b ought o r sold shall be done in accordance with the formula laid d own b y the Commission in the rules an d regulations made under this Decree.

 

136.   Every manager of an authorised un it trust scheme shall invest only in-

 

(a)     securities specified under the Trustee Investments Act as amended from time to time; and

 

(b)     such other investments as the Commission may, from time to time, app rove.

 

137.  (1)   The Commission shall have the power at an y time to inspect documents in respect of any un it trust scheme.

 

(2)     The Com mission may investigate and rep ort on the administration of any unit trust scheme, if it appears to it that it is in the interest of holders of units under the scheme to do so or the matter is in the pubic interest.

 

(3)     If an officer or agent of the manager or trustee whose affairs are being investigated or inspect by virtue-of this section refuses to produce to the Commission any document which it is his duty under this section so to produce or refuses to answer any question which is put to him by the Commission with respect to the un it trust scheme, h e commits an offence an d is liable on conviction to a fine of no t less than N20,000 .

 

138.  (1)  The Com mission may make regulations as to the Constitution and management of authorised unit trust schemes, the powers and duties of the manager and trustee of any such scheme and the rights and obligations of persons participating in any such scheme.

 

(2)     Without prejudice to the generality of subsection (1) of this section, the Commission may make regulations under this section -

 

(a)     as to the issue an d redemption of the units under the scheme;

 

(b)     as to the expenses of the scheme and the mean s of meeting them;

 

(c)     for the app ointment, removal, powers and duties of an auditor for the scheme;

 

(d)     for restricting or regulating the investment and borrowing powers exercisable in relation to the scheme;

 

(e)     requiring the keeping of records with respect to the transactions and financial position of the scheme and for the inspection of those records;

 

(f)     requiring the preparation of periodic reports with respect to the scheme and the furnishing of those reports to the participants and the Commission; and

 

(g)     with respect to the amendment of the scheme.

 

(3)     Regulations ma de under this section -

 

(a)     may make provision as to the contents of the trust deed, including provision requiring any of the matters mentioned in subsection (2) of this section to be dealt within the trust deed;

 

(b)     shall be bin ding on the manager, trustee and participants independently of the contents of the trust deed an d, in the case of the participants, shall have effect as if contained in it;

 

(c)     shall not impose limits on the remuneration payable to the manager of a scheme;

 

(d)     may contain such incidental and transitional provisions as the Commission thinks necessary or expedient.

 

139.   (1)   The manager of an authorised unit trust scheme shall give written notice to the Commission of -

 

(a)     any proposed alteration to the scheme; and

 

(b)     any proposal to replace the unit trustee of the scheme.

 

(2)     Any notice given in respect of a proposed alteration involving a change in the trust deed shall be accompanied by a certificate signed by a solicitor to the effect that the change will not affect the compliance of the trust deed with the regulation s made under section 13 8 of this Decree.

 

(3)     The trustee of an authorised unit trust scheme shall give written notice to the Commission of any proposal to replace the manager of the scheme.

 

(4)     Effect shall not be given to any such proposal unless -

 

(a)     the Commission has given its approval to the proposal; or

 

(b)     one month has elapsed since the date on which the notice was given under subsection (1) or (2) of this section without the Commission having notified the manager or trustee that the proposal is no t approved.

 

(5)     Neither the manager nor the trustee of an authorised unit trust scheme shall be replaced except by persons who satisfy the requirements of section 140 of this Decree or regulations made thereunder.

 

140.  (1)   The manager of an authorised unit trust scheme on shall no t engage in any activities other than those mentioned in subsection (2) of this section.

 

(2)     The activities referred to in subsection (1) of this section are -

 

(a)     acting as manager of -

 

(i)     a unit trust scheme,

 

(ii)     an open-ended investment company or any other body corporate whose business consists of investing its funds with the aim of spreading investment risk and giving its members the benefit of the expert management of its funds by or on behalf of that body, or

 

(iii)     any other collective investment scheme under which the contributions of the participants and the profits air income out of which payments are to be made to them are pooled;

 

(b)     activities for the purposes of or in connection with those activities mentioned in paragraph (a) of this subsection.

 

141.   (1)  The Com mission may make regulations requiring the manager of an authorised unit trust scheme to submit to him and publish or make particulars available to the public on request of a document ("scheme particulars") containing in formation about the scheme an d comp lying with such requirements as a re specified in the regulations.

 

(2)     Regulations under this section may require the manager of an authorised unit trust scheme to submit and publish or make available revised or further scheme Particulars if.-

 

(a)     there is a significant change affecting any matter contained in such particulars previously published or made available whose inclusion was required by the regulations; or

 

(b)     a significant new matter arises where the inclosing of information in respect of which would have been required in previous particulars if it had arisen when those particulars were prepared.

 

(3)     Regulations under this section may provide for the payment by the person or person s who in accordance with the regulations are treated as responsible for any scheme particulars of compensation to any person who has become or agreed to become a participant in the scheme and suffered loss as a result of any untrue or misleading statement in the particulars or the omission from them of an y matter required by the regulation s to be included.

 

(4)     Regulations under this section shall not affect any liability which any person may incur apart from the regulations.

 

142.  (1)   If it appears to the Com mission -

 

(a)     that any of the requirements for the making of an order declaring a scheme to be an authorised un it trust scheme are no longer satisfied;

 

(b)     that the exercise of the power conferred by this subsection is desirable in the interests of participants or potential participants in the scheme; or

 

(c)     without prejudice to paragraph (b ) of this subsection, that the manager or trustee of such a scheme has contravened any provision of this Decree or any rules or regulations made thereunder or, in purported compliance with any such provisions has furnished the Commission with false, inaccurate or misleading information or has contravened any prohibition or requirement imposed under this Decree,

 

                the Commission may give a directive -

 

(a)     requiring the manager of the scheme to cease the issue or redemption, or both the issue and redemption of units under the scheme on a date specified in the directive until such further date as is specified in that order or directive; or

 

(b)     requiring the. manager and trustee of the scheme to wind it up by such date as is specified in the directive or if no date is specified, as soon as practicable.

 

(2)     The revocation of the order declaring an authorised unit trust scheme to be such a scheme shall not affect the operation of any directive under subsection (1) of this section which is then in force; and a directive may be given under that subsection in relation to a scheme in the case of which the order declaring it to be an authorised unit trust scheme has been revoked if a directive under that subsection was already in force at the time of revocation.

 

143.  (1)   W here the Com mission proposes to -

 

(a)     refuse an application for an order under section 142 of this Decree; or

 

(b)     revoke such an order otherwise than at the request of the manager or trustee of the scheme;

 

it shall give the applicants or , as the case may b e, the manager and trustee of the scheme written notice of its intention to do so stating the reasons for which it proposes to act and giving particulars of the rights conferred by subsection (2) of this section.

 

(2)     A person on whom a notice is served under subsection (1) of this section may, within twenty-one days of the date of service, make written representations to the Commission and, if desired, oral representations to a person appointed for that purpose by the Commission.

 

(3)     The Commission shall have regard to any representations made in accordance with subsection (2) of this section in determining whether to refuse the application or r evoke the order, as the case m ay be.

 

144.  (1)   In any case in which the Commission has power to give a direction under subsection (1) of section 139 of this Decree in r elation to an authorised un it trust scheme or, by virtue of sub section (2 ) of that section in relation to a scheme which has been such a scheme it may apply to the Tribunal -

 

(a)     for an order removing the manager or trustee or both the manager and trustee of the scheme and replacing either or both of them with a person or persons nominated by it and appearing to it to satisfy the requirements of section 140 of this Decree; or

 

(b)     if it app ears to the Com mission that no suitable person satisfying those requirements is available, for an order removing the manager or trustee, or both the manager and trustee, and appointing an authorised person to wind the scheme u p.

 

(2)     On an application under this section to the Tribunal it may make such order as it thinks fit; on the application of the Commission, rescind any such order as is mentioned in subsection (1)(b) of this section and substitute such an order as is mentioned in subsection (1)( a) of this section.

 

(3)     The Commission shall give written notice of the making of an application under this section to the manager anti trustee of the scheme concerned and take such steps as it considers appropriate for bringing the making of the application to the attention of the participants.

 

 

Supplemental

 

145.  (1)    The Commission may appoint one or m ore competent inspectors to investigate and report on -

 

(a)     the affairs of, or o f the manager or trustee of an y authorised un it trust scheme;

 

(b)     the affairs of, or o f the operator or trustee of any recognised scheme so far as relating to activities carried on in the Federal Republic of Nigeria; or

 

(c)     the affairs of, or of the operator or trustee of, any other collective investment scheme if it appears to the Commission that it is in the interest of the participants to do so or that the matter is of public concern.

 

(2)     Any inspector appointed under subsection (1) of this section to investigate the affairs of, or of the manager, trustee or operator of any scheme may also, if he think it necessary for the purposes of that investigation, investigate the affairs of or the manager, trustee or operator of, any other such scheme as is mentioned in that subsection whose manager, trustee or operator is the same person as the manager, trustee or operator of the first mentioned scheme .

 

(5)     A person shall not under this section be required to disclose any information or produce any document which he would be entitled to refuse to disclose or produce on grounds of legal professional privilege in judicial proceedings or on grounds of confidentiality as between a client and professional legal adviser l a proceedings in any court except that a lawyer may be required to furnish the name and address of his client.

 

(6)     W here a person claims a lie n on a document its production under this section shall be with out prejudice to the lien.

 

(7)     Nothing in this section shall require a person carrying on the business of banking to disclose any information or produce an y document relating to the affairs of a customer unless -

 

(a)     the customer is a person who the inspector has reason to believe may be able to give information relevant to the investigation; and

 

(b)     the Commission is satisfied that the disclosure or production is for the purposes of the investigation.

 

(8)     an inspector appointed under this section of this Decree may, and if so directed by the Commission, make interim reports to the Commission and on the conclusion of his investigation shall make a final report to the Commission.

 

(9)     A report mad e under subsection (8) of this section shall be written or printed as the Commission may direct and the Com mission may, if it thinks fit -

 

(a)     furnish a copy, on request and on payment of the prescribed fee, to the manager, trustee, or operator or any participant in a scheme under investigation or any other person whose conduct is referred to in the report; and

 

(b)     cause the report to be published.

 

146.  (1)   As from the commencement of this Decree the Commission shall register collective investment schemes falling within the category of community savings schemes which includes 'Esusu' schemes and such other similar schemes operating within Nigeria.

 

(2)     The registration of the community savings schemes referred to in subsection (1) of this section shall be for statistical purposes only and such -schemes shall not be subject to the other provisions of this Part of this Decree regulating the activities and operations of other collective investment schemes register ed under this Part of this Decree.

 

(3)     The Commission shall prescribe forms for the registration of the schemes referred to in subsection (1) of this section.

 

(4)     The Commission shall not charge any registration fee for services rendered under this section of this Decree.

 

147.  (1)   It shall lawful for a body corporate incorporated for the sole purpose of acquiring intermediate or long term interests in real estate or property development to raise funds from the capital market through the issuance of securities which shall have the following characteristics -

 

(a)     an in come certificate giving the investor a right to a share of the income of any property or property development; and

 

(b)     an ordinary share in the body corporate giving the investor voting rights in the management of that body corporate.

 

(2)     It shall be lawful under this Decree for a trust to be constituted for the sole purpose of acquiring a property on a 'trust for sale' for the investors.

 

(3)     The trust referred to in subsection (2) of this section shall have the following characteristics -

 

(a)     the investors shall acquire units in the hug through which they shall be entitled to receive periodic distribution of income and participate in any capital appreciation of the property concerned; and

 

(b)     the investors shall also be entitled to retain control over their investments by investing directly in a particular property rather than in a portfolio of investments.

 

(4)     The Commission shall, from time to time, make rules and regulations regulating the activities of the asset backed securities of the corporate body and trust referred to in sub sections (1) an d (2) of this section .

 

 

Part XII

Investors Protection Fund

 

148.  (1)   A Securities Exchange or Capital Trade Point shall establish and maintain a fund to he known as the Investors Protection Fund which shall be administered by its governing board Thereafter referred to as "the Board") o n its behalf.

 

(2)     The assets of the Investors Protection Fund shall be the property of the Securities Exchange or Capital Trade Point but shall be kept separate from all other property and shall be held in trust for the purpose set out in this Part of this Decree.

 

149.     The Investors Protection Fund shall consist of -

 

(a)     all moneys paid to the Securities Exchange or Capital Trade Point by member companies in accordance with the provisions of this Part of this Decree ;

 

(b)     the interest and profits, from time to time, accruing from the investment of the Investors Protection Fund;

 

(c)     all moneys paid to the Investors Protection Fund by a Securities Exchange or Capital Trade Point;

 

(d)     all moneys re covered by or on behalf of the Securities Exchange or Capital Trade Point in the exercise of an y right of action conferred by this P art of this Decree;

 

(e)     all moneys paid by an insurer pursuant to a contract of insurance or indemnity entered into by the Board; and

 

(f)     all other moneys law fully paid into the Investors Protection Fund.

 

150.   All moneys forming a part of an Investors Protection Fund shall be paid or transferred into a separate bank account in Nigeria pending the investment or application of such moneys in accordance with the provisions of this Part of this Decree.

 

151.   Subject to the provisions of this Part of this Decree, there shall, from time to time, be paid out of the Investors Protection Fund of a Securities Exchange or Capital Trade Point such amounts as the Board considers appropriate which amount or amounts shall include -

 

(a)     the amount of all claims, including costs, allowed by the Board or established against the Securities Exchange or Capital Trade Point under this Part of this Decree;

 

(b)     all le gal and other expenses incurred in investigating or defending claims made under this Part of this Decree or incurred in relation to the Investors Protection Fund or in the exercise by -the Boards of the rights , powers and authorities vested in it by this Part of this Decree in relation to the Investors Protection Fund;

 

(c)     all premiums payable in respect of contracts of insurance of indemnity entered into by the Board,

 

(d)     the expenses incurred or involved in the administration of the Investors Protection Fund including the salaries and wages of persons employed by the Ward in relation thereto; and

 

(e)     all other moneys payable out of the Investors Protection Fund in accordance with the provisions of this Decree.

 

152.   (1)  A Securities Exchange or Capital Trade Point shall establish and keep proper book s of accounts in relation to its Investors Protection Fund and shall not later than 30th April in each year cause the income and expenditure for the year and a balance sheet to be made out as at the preceding 31st December in respect of such accounts.

 

(2)     A Board of a Securities Exchange or Capital Trade Point shall appoint an auditor to audit the accounts of any Investors Protection F und establish ed by it.

 

(3)     The auditor appointed by the Board shall regularly and fully audit the accounts of the Investors Protection Fund and shall complete the audit not later than 30th May to enable the audited accounts to be submitted by the Boa rd to the Commission no t later than 30th June of the calendar year following that in which the accounts relate.

 

153.  (1)  The Board may for the purpose of management o f the Investors Protection Fund appoint a management sub -committee of not less than 3 and not m ore than 5 persons.

 

(2)     The Board may by resolution delegate to a sub- committee appointed under subsection (1) this section all or any of its powers.

 

(3)     Any power, authority or discretion so delegated by the Board may be exercised by members forming a majority of the subcommittee as if that power, authority or discretion had been conferred on a majority of the members of the sub-committee.

 

(4)     Any such delegation by the Boa rd may at any tune in like manner b e rescinded or varied.

 

(5)     The Board may at any time remove any member of a sub-committee appointed by it under this section and may fill any vacancy in the sub-committee howsoever arising.

 

(6)     A decision of a sub-committee of the Board shall be of no effect until it is confirmed or ratified by the Board.

 

154.  The Investors Protection Fund shall consist of such amount as may by regulation be approved by the Commission from time to time, to be paid to the credit of the Investors Protection Fund on the establishment of a Securities Exchange or Capital Trade Point under this Decree.

 

155.  If for whatever reasons the Investors Protection Fund falls below the minimum amount approved for a Securities Exchange or Capital Trade Point the management sub-committee in the event of shall take steps to make up the deficiency -

 

(a)     by transferring to the Investors Protection Fund an amount which is equal to the deficiency from other funds of the Securities Exchange or Capital Trade Point; or 

 

(b)     in the event that there a re insufficient fund s to transfer under paragraph (a ) of this section, by determining the amount which each member company shall contribute to the Fund.

 

156.  (1)   If at any time the amount available in an Investors Protection Fund is not sufficient to satisfy the liabilities which are ascertained against a Securities Exchange or- Capital Trade Point, the Board may impose on every member company a levy of such amount as it thinks fit; or if approved by the Commission, shall impose a levy of such sum which shall in the aggregate be the equivalent to the amount specified in the approval.

 

(2)     The amount of such levy shall be paid, within the time and in the manner specified by the Board either generally or in relation to any particular case.

 

157.  (1)  A Securities or Capital Trade Point may, from time to time, from its general funds give or advance, on such terms as the Board thinks fit, any sums of money to its Investor Protection Fund.

 

(2)     Any moneys advanced under subsection (1) of this section may, from time to time, be repaid from the Investors Protection Fun d to the-general funds of the Securities Exchange or Capital Trade Point.

 

158.  Any moneys in an Investors Protection Fund which are not immediately required for its purposes may be invested by the Board in any manner in which trustees ate for -the time being authorised by the Trustee Investment Act to invest trust funds.

 

159.  (1)   Subject to this Part of this Decree, an Investors Protection Fund shall be held and applied for the purpose of compensating persons who suffer pecuniary loss from any defalcation committed by a member company or any of its directors or employees in relation to any money or other property which, was entrusted or received by a member company or any of its directors or employees whether before or after the commencement of this Decree in the course of or in connection with the business of that company.

 

(2)     If after taking into account all ascertained or contingent liabilities of an Investors Protection Fund the Board considers that the assets of the Fund so permit, the Board may decide to increase the total amount, which may be applied fro m an Investors Protection Fund an d shall inform -the Com mission accordingly.

 

(3)     Notwithstanding any provision in subsection (2) of this section the Commission may, by order, direct the Board to increase the total amount which shall be applied from an Investors Protection Fund to a particular member company in payment to persons who suffer loss through defalcations by that particular member company or any of its director s or by any o f that member company's employees.

 

(4)     For the purposes of this section, "a director of a member company" includes a person who has at the time of the defalcation in question been or has ceased to be a director of a member company if, at the time of the defalcation the person claiming compensation has reasonable grounds for believing that person to be a director of a member comp any.

 

160.  (1)  Subject to this Part of this Decree, every, person who suffers pecuniary loss as provided in section 159 of this Decree shall be entitled to claim compensation from the Investors Protection Fund and to take appropriate judicial proceedings as provided in this Decree against a Securities Exchange or Capital Trade Point to establish the claim.

 

(2)     Subject to subsection (3) of this section, a person shall not have any claim against an Investors Protection Fund in respect of a defalcation concerning money or other property which prior to the commission of the defalcation had in the due course -of the -administration of a trust ceased to be under the control of the director or directors of the m ember company concerned.

 

(3)     Subject to this Part of this Decree, the amount which any claimant shall be entitled to claim as compensation from an Investors Protection Fund shall be the amount of the actual pecuniary loss suffered by him (including reasonable cost of disbursements incidental to the making and providing of his claim) less the amount or value of all moneys or other benefits received or receivable by him from any source other than the Fund in reduction for the loss.

 

(4)     In addition to any compensation payable under this Part of this Decree, interest shall be payable out of the Investors Protection Fund concerned on the amount of the compensation, less any amount attributable to costs and disbursements, at the rate of 5 per cent per annum calculated from the day upon which the defalcation was committed and continuing until the day upon which the claim is satisfied.

 

161.  (1)   The Commission may cause to be published in a daily newspaper circulating generally in Nigeria a notice, in or to the effect of the form prescribed, specifying a date, not being earlier than three months after the said publication, on which claims for compensation from the Investors Protection Fund, in relation to the person specified in the notice, m ay be made.

 

(2)     A claim for compensation from an Investors Protection Fund in respect of a defalcation shall be made in writing to the Board within 6 months after the claimant became aware of the defalcation, and an y claim which is not so mad e shall be barred unless the Com mission otherwise determines.

 

(3)     No action for damages shall lie against a Securities Exchange or Capital Trade Point or against any member or employee of a Securities Exchange or Capital Trade Point or of a Board or management subcommittee by reason of an y notice publish ed in good faith and without malice for the purposes of this section.

 

162. The Commission may, subject to this Part of this Decree, allow and settle any claims for compensation from an Investors Protection Fund at any time after the commission of the defalcation in respect of which the claim arose.

 

163.  (1)  Where in any proceedings brought to establish a claim the Tribunal is satisfied that the defalcation on which the claim is founded was actually committed, and that otherwise the claimant has a valid claim, the Tribunal shall by order-

 

(a)     declare the fact and the date of the defalcation and the amount of the claim payable; and

 

(b)     direct that the Investors Protection Fund concerned allows, the claim so declared and deal with the same in accordance with the provision s of this Part of this Decree.

 

(2)     The Tribunal m ay make rules of practice and procedure generally for proceedings under this Part of this Decree.

 

(3)     In any proceedings under this Part of this Decree all questions of costs shall be at the discretion of the Tribunal.

 

164.    The Commission m ay, from time to time, require any person to produce and, deliver any securities, documents or statements of evidence necessary to support any claim made or necessary for the purpose of either exercising its rights against a member company or the directors thereof or any other person concerned or of enabling criminal proceedings to be taken against any person in respect of a defalcation, and in default of delivery of any such securities, documents or statements of evidence by such first-mentioned person, the Commission may disallow any claim by him under this Part of this Decree.

 

165.   On payment out of an Investors Protection Fund of any moneys in respect of any claim under this Part of this Decree, the Securities Exchange an d Cap ital Trade Point. s hall be subrogated to the extent of payment to all the rights an d remedies of the 6aiinan t in relation to the loss suffered by him from the defalcation.

 

166.   No moneys or other property belonging to a Securities Exchange or Capital Trade Point, other than the Investors Protection Fund, shall be available for the payment of any claim under this Part of this Decree whether the claim is allow ed by the Commission or is made the subject of an order of the Tribunal.

 

167.  (1)  Where the amount at credit in an Investors Protection Fund is insufficient to pay the whole amount of all claims against it which have been allowed or in respect of which orders have been made, then the amount at the credit in the Investors Protection Fund shall, subject to subsection (2) of this section, be apportioned between the claimants in such manner as the Commission thinks equitable, and any such claim so far as it then remains unpaid shall b e charged against future receipts of the Investors Protection Fund and paid out of the Investors Protection Fund when moneys are available the rein.

 

(2)    Upon payment out of the Investors Protection Fund of the total amount, all the other claims against the Investors Protection Fund which may thereafter arise or be made in respect of defalcations by or in connection with the said m ember company shall be absolutely discharged.

 

168.  (1)   A Securities Exchange or Capital Trade Point may in its discretion enter into any contract with any person carrying on fidelity or investor protection insurance business in Nigeria by which the Securities Exchange or Capital Trade Point shall be indemnified to the extent and in the manner provided by the contract against liability in respect of claims under this Part of this Decree.

 

(2)     A contract may be entered into in relation to member companies generally or in relation to any particular member company or member companies named therein or in relation of members companies with the exclusion of an y particular m ember company or member companies named therein.

 

(3)     No action shall lie against a Securities Exchange or Capital Trade Point or against any member or employee of a Securities Exchange and Capital Trade Point or against any member of its management for injury alleged to have been suffered by any member company by reason of the publication in good faith of a statement that any contra ct entered into under this section does or does no t apply with respect to it.

 

169.  No claimant against an Investors Protection Fund shall have any rights of action against any person or body of person s with whom a contract of insurance or indemnity is made under this Par t of this Decree in respect of such contract, or have any right or claim with respect to any money paid by the insurer in accordance with any such contract.

 

170.  In this Part of this Decree -

 

"Board" means the management sub-committee, Council or a body responsible for the management of a Securities Exchange or Cap ital Trade. Point;

 

"Investor Protection Fund" or "Fund" means an Investors Protection Fund establishment under this Part;

 

"Securities Exchange or Capital Trade Point" in relation to an Investors Protection Fund, means the Securities Exchange or Capital Trade Point which established the Fund.

 

 

Part XII

Borrowing by States, Local Governments and Other Government Agencies, etc.

 

171.   The bodies to which this Part of this Decree applies

 

(a)     any State Government and 'the Federal Capital Territory, Abuja;

 

(b)     any Local Government;

 

(c)     any statutory body established by the Law of a State or Local Government; and

 

(d)     any company which is wholly or partly own ed by a State or Local Government.

 

172.  (1)   Subject to the provisions of section 173 of this Decree, a body to which this Part of this Decree applies may raise, from time to time, internal loans for any specific project authorised by the approving authority of the body in any one or m ore of the following ways, that is -

 

(a)     by the issue of securities in the form of registered bonds; or

 

(b)     by the issue of securities in the form of -promissory notes;

 

so however that the total amount of loan s outstanding at any particular time including the proposed loan shall not exceed fifty per cent of the actual revenue of the body concerned for the preceding years.

 

(2)     Every, issue of a registered bond or other securities for the purpose of raising any specified sum of money shall be deemed to be by bond or securities issued in respect of a separate loan notwithstanding that the sum of money so raised is part only of a sum of money authorised by any other law to b e raised by w ay of a loan.

 

(3)     Securities created or issued under this Part of this Decree shall be securities to which the Trustee Investments Act applies.

 

173.  (1)   A body to which this Part of this Decree applies shall not raise sums of money or any part thereof by way of any intern al loan directly from the Capital Market except in accordance with the provisions of this Decree and rules and regulations made there.

 

(2)     An application to raise a loan under this Part of this Decree shall be in such form as the Commission may direct.

 

(3)     An application made under this section shall, amongst other documents, be accompanied by an original copy of a n Irrevocable Letter of Authority giving the Accountant-General o f the Federation the authority to deduct a t source fro m the statutory allocation due to the body, in the event of default by the body in meeting its payment obligations under the terms of the loan and the trust deed made pursuant to the provision of this Part of this Decree.

 

(4)     Any amount deducted pursuant to the provisions of subsection (3) of this section shall be credited into the sinking fund established under section 200 of this Part of this Decree for the purpose of redeeming the outstanding obligation.

 

(5)     A copy of the Irrevocable Letter of Authority issued pursuant to subsection (3) of this section shall also be lodged with the trustees appointed under section 195 of this Part of the Decree.

 

174.   The principal monies and interest represented or secured by any registered bond or securities issued under this Decree shall be charged on and payable out of the general revenue and assets of the body concerned and of the assets of the appropriate authority or project which is the beneficiary of the proceed s of the loan.

 

175.   (1)  The particulars of each loan to be raised pursuant to this Decree shall be published in the Gazette or any other official document by the body raising the loan and shall include the following:

 

(a)     the beneficiary of the loan ;

 

(b)     the sum of money to be raised by the loan;

 

(c)     the mod e or mode s of raising the loan ;

 

(d)     the rate of interest payable o n the loan;

 

(e)     the dates in each year on which the half-yearly or quarterly interest on the loan shall be payable;

 

(f)     the time at which a half-yearly, quarterly appropriation out of the. general reserve and assets of the body or project of the body shall be made as a contribution;

 

(g)     the date of redemption of the registered bond or securities to be issued for the purpose of raising the loan; and

 

(h)     any other information relating to the-,loan considered necessary to effectively raise the loan.

 

(2)     The date of redemption of any registered bond or securities shall not be later than twenty five years from the date of the issuance of the registered bond of securities.

 

(3)     Where it is deemed expedient by a body to reserve an option to redeem any registered bond or securities at any date earlier than the date of redemption specified for -such bond or securities by the directions under subsection (1) of this section, the body shall by such directions further specify the terms and conditions upon which the bond or securities may be redeemed at such earlier date.

 

176.  (1)   A body shall keep a register in which all securities transactions entered into by the body are recorded into which shall be entered all information which by this Decree a re required to be entered in the register.

 

(2)     A body shall for the purpose of carrying out its functions under subsection (1) of the section appoint any government agency or competent person as Registrar and the appointment shall be subject to such terms and conditions as may be deem ed fit by the body concerned.

 

(3)     A register kept under this section shall be kept in such place as may be approved on behalf of the body and contain, amongst other thing s the following:-

 

(a)     the names and addresses of the holders for the time being of the securities concerned and

the persons deriving title therefrom;

 

(b)     the amount of securities held by every holder; and

 

(c)     the date on which the name of every h older is entered in respect of the securities held in his name .

 

(4)     The Registrar may be required to submit to an independent audit of his books of account in connection with his function s under this P art of this Decree.

 

177.   Subject to the consent of its approving authority a body may appoint any reputable issuing house or financial institution registered with the Commission, for the purpose of undertaking on behalf of the body the raising of any specific loan pursuant to the provisions of this Part of this Decree.

 

178.   A body shall pay to the person registered for the time being as the bondholder of the principal sum represented by the body and the interest due on that sum at the rate and on the dates specified under section 175 of this Decree or in pursuance of an option to redeem the bon d.

 

179.   For the purposes o f this Part o f this Decree, no person shall be entitled to any registered bond unless he is registered as a bondholder in respect of the bond.

 

180.   No person shall be registered as a bondholder at any time unless he had paid in full the purchase price of the bond .

 

181.  (1)   Every bond holder shall be entitled to receive from the Registrar a bond certificate covering the amount of his holding and no bond h older, other than the first bond holder of the bond, shall be entitled to receive a bon d certificate unless h e had paid the prescribed fee.

 

(2)     The Registrar may, with the approval of the approving authority of the bond and on payment of the prescribed fee, issue more than one bond certificate in the aggregate covering any holding by one person.

 

182.  (1)   For the purposes of this Part of this Decree, the title of any bondholder to a registered bond shall not be deemed to be transferred to any other person except upon the execution of an approved instrument of transfer to the other person and upon the registration of the transferee as the bond holder as provided under section 183 of this Decree .

 

(2)     Interest which is due in respect of a registered bond but which has not been paid to a bond holder for the time being shall not be deemed to be payable to a transferee of that bond unless the instrument of transfer expressly provides for the payment of that interest to the transferee.

 

183.  (1)   No person shall be registered as the transferee of registered bond except on surrender, to the body or the appointed Registrar, of the bond certificate and the instrument of transfer relating to the bond and on the payment of the prescribed fees.

 

(2)     The Registrar shall effect the transfer of the title to a bond within the period stipulated by the Securities Exchange or Capital Trade Point and he shall post a written notice of the receipt of an application for transfer to the registered h older in whose name the application is made.

 

184.  (1)  The Registrar may register . a lien on any registered bond in accordance with such provisions as are prescribed by the rules and regulations of a Securities Exchange or Capital Trade Point and on the payment of the prescribed fees.

 

(2)     As from the commencement of the Decree, a lien which is registered under this section of this Decree shall have priority over any lien not so registered or which is registered subsequent thereto.

 

185.  The register shall be closed for a period of twenty-one days immediately proceeding each date on which interest on that bond falls due and no transfer of that bond shall be registered during that period.

 

186.  (1)   The entries in a bond register shall be conclusive evidence of the facts, matters, particulars and transactions to which those en tries relate.

 

(2)     Notwithstanding the provisions of any other law, or enactment, a copy of an entry in the register certified under the hand of the Commissioner, Chairman or such other appropriate officer of a body or the appointed Registrar, to be a true copy of the original en" shall be receivable in evidence in any judicial proceeding un less a judge shall otherwise, direct.

 

187.  (1)   Every promissory note shall be signed by the Commissioner o r Chairman or such other appropriate officer of a body an d shall w hen issued, bind the relevant body to pay the principal sum mentioned in that note and the interest thereon in accordance with the provisions of this Part of this Decree at the rate and on the dates specified by the directions issued pursuant to section 175 of this Decree or in pursuance of an option to redeem the note reserved in the directives.

 

(2)     Promissory notes shall be issued in such denominations as the Commissioner or Chairman or such other appropriate officer of a body may, with the approval of the approving authority body, direct.

 

188.   Notwithstanding the provisions of the Bills of Exchange Act to the contrary -

 

(a)     no endorsement of a promissory note shall be valid unless made by the signature of the holder written on the back of the note in one of the spaces provided for that purpose; and

 

(b)     no person shall, not by reason only of his having endorse d a promissory note, be liable to- pay any money due either as principal or as interest on the promissory note.

 

189.   Notwithstanding anything to the contrary contained in other law, or enactment contrary-

 

(a)     when a promissory note is payable to two or more persons jointly and either or any of them dies, the note shall be payable to the survivor or survivors of the deceased person or persons; and

 

(b)     where a promissory note is payable to two or more persons severally, and either or any of them dies, the note shall be payable to the survivor or survivors of the deceased person or persons or to the representative of the deceased or to any of them.

 

(2)     Nothing contained in this section shall affect any claim which any representative of a deceased person may have against the survivor or survivors under or in respect of any promissory note to which subsection (1) of this section applies.

 

190.  (1)   Every registered bond shall be signed by the Commissioner or Chairman or such other appropriate officer of a body and shall, when issued, bind the issuer to pay the principal sum and the interest on that sum in accordance with the provisions of this Decree at the rate and on the dates specified in the trust deed.

 

(2)   Registered bonds shall be issued in such denominations as the Commission we, Chairman or such other appropriate officer of a body with, the consent of the Commission may, direct.

 

191.   Where any interest is payable under this Decree in respect of any bond or securities, a body shall in each payment on the half year ending or quarterly ending with the date on which the interest on such bond or securities falls due, appropriate out of the general revenue and assets of the body and of the assets of the project or of the appropriate authority a sum sufficient to meet all interest payable on that date by the body and shall authorize payment of such interest out of the sum so appropriated.

 

192.  (1)   The interest due on a registered bond or securities shall be payable half yearly or quarterly on the dates specified in a trust deed made pursuant to this Decree.

 

(2)     Where any amount has become payable on any date as interest due on any registered bond or securities, no interest on that amount shall, after that date, be paid or payable by a body to any person in any circumstances.

 

193   No person shall be entitled to claim interest on any registered bond or securities in respect of any period which has elapsed after the earliest date on which demand could lawfully have been made for the re-payment of the principal amount due on such bond or securities.

 

194.   All payments of interest and all payments of principal amount due on any registered bond or securities shall be made at the registered office of a body or at any other lawfully authorized place as may he specified within Nigeria for the payment of any such interest or principal amount.

 

195.  (1)   The Commissioner, Chairman or such other appropriate officer of a body subject to the approval of the 1991 approving authority, may appoint a licenced trustee company or any reputable bank licensed under the Banks and Other Financial Institutions Decree 1991, or a reputable insurance company licensed under the Insurance Decree 1997 or both as trustees for the purpose of acting on behalf of the bond holders with regard to every loan, raised under this Decree, provided that a trustee appointed under this section shall not have any fiduciary relationship with the issuer.

 

(2)     A draft copy of any trust deed made pursuant to this Part of this Decree shall be sent to the Commission for prior approval.

 

196.   The Trustees appointed under this Part of this Decree shall have all the powers conferred upon trustees by the Trustees Investment Act and with prejudice to the provisions of tat Act -

 

(a)     the trustees may, at their discretion and upon request in writing of a majority of bond holders present and voting at a special meeting duly convened for that purpose, institute proceedings to obtain the repayment of a bond at anytime after such bond shall have become repayable under its terms of issue;

 

(b)     the trustees may act on the advice or opinion of any solicitor, valuer, surveyor, broker, auctioneer, accountant or other expert whether obtained by a body to which this Part applies or by the trustees or otherwise;

 

(c)     save as herein otherwise expressly provided the trustees shall, as regards all trusts, powers, authorities and discretion hereby vested in them, have absolute discretion as to the exercise thereof and provided they have acted honestly and reasonable shall be in no wise responsible for any loss or damage which may result from the exercise or non-exercise thereof,

 

(d)     the trustees shall not be responsible for acting upon any resolution purporting to have been passed at any meeting of the bond holders in respect whereof minutes have been made and signed notwithstanding any defect 'in the constitution o f the meeting or in the proceedings thereat;

 

(e)     without prejudice to the right of indemnity conferred up on the trustees by law, the trustees and attorneys, agents or other persons appointed b y the trustees under this section shall b e indemnified by a body against all liabilities and expenses reasonably incurred by them in the execution of the powers of the trustees under this Part of this Decree.

 

(f)     the Commissioner, Chairman or the appropriate officer of a body may in writing give the trustees such general or specific direction not inconsistent with the provisions of this Part of this Decree, on any matter relating to the trust and the trustees shall give effect to every such direction and shall not be liable on account of anything d one or purported to be don e by them in good faith in connection thereof;

 

(g)     whenever in the interest of bond holders the trustees deem it expedient, the trustees may delegate by a power of attorney to any other person or body corporate with the consent of the Commissioner or Chairman or any appropriate officer, all or any of the powers vested in them under this Part of this Decree upon such terms and conditions as the trustees may deem fit and the trustee shall be responsible for all the acts and defaults of any person or company to which such powers are so delegated ,

 

(h)     the trustees may in the discharge of their functions under this Part of this Decree employ such agents and upon such conditions as they may think reasonable and appropriate, subject to the approval of the Commissioner or Chairman or the appropriate officer appointed in his place by a body to which this Part applies.

 

197.   A trustee or any director of the trustee shall not be interested party precluded from underwriting or guaranteeing the subscription of or subscribing for or otherwise acquiring, holding or dealing with any part of the securities provided that such a trustee, director or officer is not thereby put in a position in which he holds more than twenty-five percent interest in the bond or securities and provided that such interest is disclosed to the approving authority of the body concerned be fore a person is so appointed.

 

198.   The power to appoint new trustees under this Part of this Decree shall be vested in the Commissioner, Chairman or any appropriate officer subject to the approval of the approving authority of that body but no person shall be appointed who shall not previously have been approved by resolution pass ed by a majority of bond holders present at a meeting duly called for such purpose.

 

199.   The trustees may if they deem it to be in the interest of the bond holders, unless otherwise directed by a resolution passed by a majority of bond holders at a meeting duly convened for such purpose, validate as they shall deed fit, any breach by a body or any authority acting in that behalf of any covenants and provisions of this Part of this Decree, but without prejudice to the rights of the trustees in respect of any subsequent breach thereof.

 

200.   After the date specified in the particulars published pursuant to section 175 of this Decree as the date from which contributions to the sinking fund for any loan shall commence, and with the approval of the appropriate authority in each half year or quarterly ending with the interest payment dates specified in the particulars appropriate out of the general revenue and assets of the body concern ed and of the project or of the appropriate authority a sum determined as the contribution to the sinking fund established for the purpose of redeeming the loan.

 

201.   A separate sinking fund shall b e established for each loan raised under this Part of this Decree.

 

202.  (1)   All moneys appropriated under section 200 of this Decree as contributions to the sinking fund established for any loan shall be paid to the trustees appointed under section 195 of this Decree and may be invested in such securities as are specified in the Trustee Investments Act.

 

(2)     The trustees may, from time to time, with the approval of the appropriate authority vary any investment made pursuant to subsection (1) of this section or may realize and re-invest any moneys invested under that subsection.

 

(3)     The dividends, interest, bonus and other profits of any investment of any part of any sinking fund shall be invested by the trustees so as to form a part of that sinking fund in like manner as moneys appropriate under section 200 of this Decree as contribution s to that sinking fund.

 

203.  (1)   Notwithstanding anything to the contrary contained in this Part of this Decree, if at any time the trustees are satisfied that the sinking fun d of any loan raised under the provisions o f this Part of this Decree will be sufficient with further accumulations of interest, but without further payments of contributions, to enable the loan to be redeemed at the time fixed for its redemption they shall inform the body accordingly, and the Commissioner, or Chairman or any appropriate officer shall be authorized in such event to suspend further payments of half-yearly or quarterly contributions to that sinking fund.

 

(2)    The contributions to that sinking fund shall be recommenced if the trustees at any time thereafter inform the appropriate authority that they are no longer satisfied that the sinking fund without further accumulations of interest will be sufficient for the redemption of that loan .

 

204.   There shall be p4id out of the sinking fund all expenses specifically incurred in, or incidental to, the investment and management of that fund an d the re-payment of the loan for which that fund was established.

 

205.   In the event of the sinking fund established under this Part of this Decree being found at the time fixed for the repayment of that loan to be insufficient for such redemption, the deficiency shall be made good out of the general revenue and assets of the body concerned and that of the project which is the beneficiary of the loan.

 

206.   Upon default by a body to meet its payment obligations under the loan and after the expiration of six months therefrom the trustees shall present the copy of the Irrevocable Letter of Authority referred to in subsection (4) of section 173 of this Decree to the Accountant-General of the Federation who shall take immediate steps to deduct from the statutory allocation of the body concerned such amount or amounts as are specified by the trustees as required to be paid into the sinking fund for the purpose of redeeming any outstanding obligations under the loan .

 

207.  (1)    The Registrar may issue duplicate bond certificates and duplicate securities in such circumstances as may be specified.

 

(2)     The Registrar may issue renewals of bond certificates and promissory notes in such circumstances as may be prescribed.

 

208.   The Registrar may in such circumstances as may be specified-

 

(a)     issue a notice to the holder of any promissory note directing him to apply for a renewal of the promissory note, and ,

 

(b)     withhold payment of the interest or principal amount due in respect of that promissory note until the application for. renewal has been mad e and determined.

 

209.   Subject to such condition as the Commissioner, Chairman or an appropriate officer of a body m ay specify the Registrar may -

 

(a)     on the application of a person claiming to be entitled to any bond or securities, or

 

(b)     on being satisfied of the genuineness of the claim of such applicant; or

 

(c)     on surrender of the bond certificate relating to such bond or of such securities receipted in the specified manner; or

 

(d)     on payment of the prescribed fee,

 

consolidate or sub-divide such bond or securities and issue to the applicant one or more new bond certificates or securities as may be required.

 

210.  W here an application is mad e to the Registrar under this Part of this Decree for the issue of a duplicate security or for the exchange, renewal, consolidation or subdivision of any bond or securities, the Registrar may require the applicant as a condition precedent to the grant of the application, to execute a bond with or without sureties undertaking to indemnify the body concerned against the claims of all persons claiming under the original bond certificate or security or under the bond or securities so exchanged, so renewed, consolidated or sub-divided, a s the case ma y be.

 

211.  On payment by or on behalf of a body to the holder of a registered bond or securities of the amount expressed therein on or after the date when it becomes due or on the renewal of a promissory note under section 212 of this Decree on the consolidation or sub-division of a bond, or securities under section 209 of this Decree a body shall be discharged in the same way to the same extent as if such bond or securities were a promissory note payable to the bearer.

 

212.  Save as otherwise provided in this Part of this Decree the liability of a body shall-

 

(a)     in respect of any registered bond or security redeem ed on or after the date on which payment of the principal amount becomes due, be discharged after the lapse of six years from that date;

 

(b)     in respect of any security in place of which a duplicate is issued under section 207 o f this Decree be discharged after the lap se of six years from the date o f the issue o f such duplicate or from the d ate of the last payment of interest on such security, whichever date is later;

 

(c)     in respect of a security for which a renewed security is issued under section 208 of the Decree or upon a consolidation or subdivision under section 209 of the Decree be discharged after the lapse of six years from the date of the issue of the renewed security or of the new bond or securities, as the case m ay be.

 

213.  (1)   If within six months of the death of a person who was entitled to a registered bond or securities the nominal or face in special value of which does not in the aggregate exceed 5,000, probate of the will or letters of administration of the estate of the deceased a person is not produced to the Registrar, the Registrar may, after such inquiry as he may deem necessary, determine who person entitled to such bond or securities to administer the estate of the deceased and ma y -

 

(a)     where any such bond or securities relates to a loan due for payment, authorise the registration of the name of such survivor or survivors in substitution for the name of the deceased person in the register of bond and securities and the payment to such survivor or survivors of the a mount due in respect of that bond;

 

(b)     where any such bond or securities relates to a loan not due for repayment authorize the registration of the name of such survivor or survivors in substitution for the name of the deceased.

 

(2)     Any creditor or claimant against the estate of the deceased person may recover his debt or claim out of money paid to any survivor or survivors under subsection (1) of this section and remaining in his hands unadministered in the same manner and to the same extent as if the said person had obtained letters of administration of the estate of the deceased, and nothing in this section shall affect any claim of an executor or administrator or other representative of the deceased against such person other than a claim to re cover amounts lawfully paid by him in the course of the ad ministration of the estate of the deceased.

 

214.   Every bond certificate or securities issued under this Part of this Decree shall bear in a printed, stamped, engraved, form-

 

(a)     the crest of the body concerned (if any);

 

(b)     the signature of the Commissioner, Chairman or such other appropriate officer of a body;

 

(c)     the signature of the Registrar; and

 

(d)     where applicable, the signature of the appropriate authority in the case of a statutory corporation which is directly the beneficiary of the loan to which the bond certificate or security relates.

 

215.  (1)   Save as otherwise provided in or under this Part of this Decree no notice of any trust in respect of any registered bon d or securities shall b e receivable b y the Register o r a relevant body.

 

(2)    The Registrar shall not be deemed to have received notice of a trust by reason only of the fact that he has recognised an endorsement on a bond or securities by an executor or an administrator as such, nor shall he inquire into the terms of any w ill by which such executor or administrator may be bound.

 

216.   Any provision in any other law or enactment to the contrary notwithstanding all documents or instruments made or used under the provisions of this Part of this Decree shall be in such form as may be prescribed and shall be exempted from stamp duty payable to the Federal or a State Government.

 

217.   A body may delegate to the Commissioner or Chairman or such other appropriate officer all or any of the powers conferred on it by the approving authority subject to such restriction, conditions and qualifications, not inconsistent with the provision s of this Part of the Decree as ma y be specified.

 

218.  (1)   No person shall be entitled to inspect, or to receive information in relation to registered bonds or securities, save on payment of such fee and in such circumstances and on such terms and conditions as may be prescribed fro m time to time.

 

(2)     Nothing in this section shall apply to the Auditor-General of the Federation or the Accountant-General of the Federation or of a State or such other appropriate officer of the Federal or State Government or any public officer acting in the course of his official capacity.

 

219.  (1)  The Commission may make such rules and regulations generally for the purpose of giving effect to the provisions of this Part of this Decree and the rules an d the regulations may include -

 

(a)     the manner in which payment of interest in respect of bonds or securities is to be made and acknowledged ;

 

(b)     the circumstance in which promissory notes shall be renewed before further payment of interest thereon may be claimed;

 

(c)     the issue of duplicate bond certificates and duplicate securities;

 

(d)     the renew al of bond certificates and securities;

 

(e)     the manner of payment of interest to joint holders of bon d or securities;

 

(f)     the circumstances in which alterations may be made in the registration of bond or securities;

 

(g)     the payment of principal sum s or interest and transfer of bond and securities in the case of persons under a legal disability;

 

(h)     the disposal of unclaimed interest;

 

(i)     the feet to be paid in respect of anything to be issued or d one under the provisions of this Part of this Decree.

 

(j)     all matters required by this Part of this Decree to be prescribed and all matters incidental to or connected with the matters hereinbefore enumerated.

 

220.  A body to which this P art of this Decree applies in exercising the powers granted under this Part of this Decree shall comply with the listing requirements of the Securities Exchanges and Capital Trade Points.

 

221.   An y loan raised b y any of the bodies to which this Part of this Decree applies shall, until the loan is fully repaid, be a binding and continuing obligation on the State or Local Government boards or supervising Ministries of corporate entities to which this Decree applies with regards to the repayment of all principal sums and interest payments due and outstanding under the loan including other terms and conditions arising therefrom .

 

222.   Nothing in this Part of this Decree shall be construed as derogating from the provision of any other enactment which restricts the borrowing of money by an y body to which the provisions of this Part of this Decree applies or require s the consent of any authority to the raising of such money b y any such body.

 

223.   In this Part of this Decree, the following expression shall have the meanings hereby assigned to them respectively-

 

"appropriate officer" means the chief executive or any other officer authorised by the board of a statutory or government agency;

 

"approving authority" in the case of a State means the Executive Council of the State, in the case of Local Government mean s the Local Government Council and in the ca se of a government agency or statutory body, the board or the supervisory Ministry of that body, as the case may be;

 

"body" or "bodies" means those bodies or body referred to under section 17 1 of this Decree;

 

"bon d" means an instrument of indebtedness issued by a body to which this Part of this Decree applies to secure the repayment of money borrow ed by such body;

 

"bond holder" means a person holding a registered bond and whose name is entered as the owner thereof in the register ;

 

"Chairman" means the Chairman of a Local Government Council;

 

"Commissioner" means the Commissioner in a State responsible for matters relating to finance;

 

"Executive Council" means the Executive Council of a State;

 

"issuing house" mean s the paying agent appointed under the provisions of this Part of this Decree;

 

"loan" means an internal loan and includes any arrangement under which a body is to be afforded credit facilities and references to the making, acceptance, repayment or application for a loan or to any other form of transaction relating to a loan shall be construed accordingly;

 

"paying agent" means the paying agent appointed under the provisions of this P art of this Decree;

 

"promissory note" means a promissory note issued by a body under the provisions of this Part of this Decree;

 

"register" means the register of securities and of the holders of such securities kept by the Registrar for purposes of this P art of this Decree;

 

"Registrar" means a registrar appointed by a body under this Part of this Decree;

 

"registered securities" includes bonds and promissory notes issued under the provisions of this Part of this Decree;

 

"security holder" means a person holding a registered security and whose name is entered as the owner thereof in the register kept or maintained under this Part of this Decree;

 

"trustee" means the trustee appointed under the provisions of this Part of this Decree.