An examination of the power of removal of secretaries of private companies in Nigeria

• Jurisdiction: South Africa
• Author: Andrew Ejovwo Abuza
• Date: 16 August 2019
• Pages: 34-76
• Published date: 16 August 2019
• Citation: (2017) 4(2) Journal of Comparative Law in Africa 34

34

AN EXAMINATION OF THE POWER OF

REMOVAL OF SECRETARIES OF PRIVATE

COMPANIES IN NIGERIA

ANDREW EJOVWO ABUZA*.

Abstract

The Nigerian Companies and Allied Matters Act (CAMA) 2004 came into

force on 2 January 1990. It provides the procedure for the removal of secretaries

of public companies for alleged misconduct by the directors of public companies

which said procedure accords them an opportunity to defend themselves before

they can be removed for alleged misconduct. Thus, the employment of secretaries of

public companies is protected by statute in Nigeria. There are, however, no statutory

provisions in the CAMA 2004 on the procedure for the removal of secretaries of

private companies for alleged misconduct by directors of private companies. In short,

the Act is silent on the subject. This lacuna is being abused, as some directors of

private companies in Nigeria have sought sanctuary under it to remove secretaries

of private companies for alleged misconduct without giving them an opportunity to

defend themselves. Although, no statutory procedure is in the CAMA 2004 on

the removal of secretaries of private companies for alleged misconduct by directors of

private companies, this ar ticle examines the power of removal of secretaries of private

companies for alleged misconduct by directors of private companies in Nigeria and

draws an analogy against the backdrop of the provisions of the CAMA 2004

with respect to the removal of secretaries of public companies for alleged misconduct,

the provisions of the Constitution of the Federal Republic of Nigeria (CFRN)

1999, the common law rules of natural justice, case law as well as the provisions

of International human rights instruments. It is the view of the writer that the

removal of secretaries of private companies for alleged misconduct by directors

of private companies in Nigeria without giving them an opportunity to defend

themselves is discriminatory and contrary to section 36 of the CFRN 1999, the

common-law rules of natural justice, international human rights instruments and

international best practices. Notwithstanding the fundamental differences between

private companies and public companies, the writer suggests, among other things,

the amendment of the Act to provide the procedure for the removal of secretaries of

private companies for alleged misconduct by directors of private companies which

said procedure must accord them an opportunity to defend themselves before they

can be removed for alleged misconduct by directors of private companies. This is

in line with the ‘equal protection of the law and non-discrimination’ principle as

enunciated in section 42(1)(a) and (b) of the CFRN 1999 and international

* A.E. Abuza, B.Sc; M.Sc; LL.B; LL.M; B.L; MNIIA; AMNIM; MNBA; MNALT; FRHD;

FIPMD. Lecturer and former Sub-Dean, Faculty of Law, Delta State University, Abraka (Oleh

Campus), Nigeria, Legal consultant and Principal of the law firm of Abuza and Associates.

(2017) 4(2) Journal of Comparative Law in Africa 34

© Juta and Company (Pty) Ltd

AN EXAMINATION OF THE POWER OF REMOVAL OF SECRETARIES OF

PRIVATE COMPANIES IN NIGERIA 35

human rights instruments; right to a fair hearing as guaranteed under the common-

law rules of natural justice, section 36 of the CFRN 1999 and international

human rights instruments; international best practices; and the rule of law.

La loi nigériane sur les sociétés et les affaires connexes (CAMA 2004) est entrée en

vigueur le 2 janvier 1990. Elle prévoit la révocation des secrétaires des entreprises

publiques pour mauvaise conduite par les administrateurs des entreprises publiques,

et ladite procédure leur permet de se défendre avant qu’ils puissent être révoqués pour

mauvaise conduite présumée. Ainsi, l’emploi de secrétaires d’entreprises publiques est

protégé par la loi au Nigéria. Toutefois, il n’existe pas de dispositions législatives dans

le CAMA 2004 sur la procédure de révocation des secrétaires de sociétés privées pour

mauvaise conduite présumée par les administrateurs des sociétés privées. (En bref, la Loi

est muette sur le sujet). Cette lacune a été exploitée, car certains directeurs d’entreprises

privées au Nigéria en ont profité pour révoquer les secrétaires d’entreprises privées pour

mauvaise conduite présumée sans leur donner l’occasion de se défendre. Bien qu’aucune

procédure légale ne soit prévue dans le CAMA 2004 concernant la révocation des

secrétaires d’entreprises privées pour mauvaise conduite présumée par les administrateurs

de sociétés privées, cet article examine le pouvoir de révocation des secrétaires d’entreprises

privées pour mauvaise conduite présumée par les administrateurs des sociétés privées au

Nigéria et établit une analogie dans le contexte des dispositions du CAMA en ce qui

concerne la révocation des secrétaires d’entreprises publiques pour mauvaise conduite

présumée, les dispositions de la Constitution de la République Fédérale du Nigeria

(CFRN) 1999, les règles de droit commun de la justice naturelle , la jurisprudence

ainsi que les dispositions des instruments internationaux relatifs aux droits de l’homme.

Selon l’auteur, la révocation des secrétaires d’entreprises pr ivées pour mauvaise conduite

présumée par les administrateurs des sociétés privées au Nigéria sans leur donner la

possibilité de se défendre est discriminatoire et contraire à l’article 36 de la CFRN

1999, les règles de droit commun de la justice naturelle, les instruments internationaux

relatifs aux droits de l’homme et les meilleures pratiques internationales. Nonobstant

les différences fondamentales entre les entreprises privées et les entreprises publiques,

l’auteur suggère, entre autres, la modification de la loi pour prévoir une procédure pour

la révocation d’secrétaires d’entreprises privées pour mauvaise conduite présumée (par les

administrateurs des sociétés privées) laquelle procédure doit leur accorder une occasion de

se défendre avant qu’ils puissent être révoqués pour mauvaise conduite présumée (par

les administrateurs de sociétés privées). Cela s’inscrit dans le principe de la «Protection

égale de la loi et de la non-discrimination» énoncé à l’article 42 (1) a) et b) du CFRN

1999 et aux instruments internationaux relatifs aux droits de l’homme; le droit à un

procès équitable tel que garanti par les règles de droit commun de la justice naturelle,

l’article 36 de la CFRN 1999 et les instruments internationaux relatifs aux droits de

l’homme; les meilleures pratiques internationales; et la règle de droit.

Keywords: Removal of private company secretary, CAMA 2004, Nigeria,

statutory employment

© Juta and Company (Pty) Ltd

36 JOURNAL OF COMPARATIVE LAW IN AFRICA VOL 4, NO 2, 2017

Introduction

On 2 January 1990 the Nigerian Companies and Allied Matters Decree

1 of 1990 was promulgated into law by the military administration of

General Ibrahim Badamasi Babangida (IBB). The Decree later became

known as the CAMA1 1990. This enactment subsequently became the

CAMA2 2004. Section 296(1) of the CAMA 2004 provides that ‘A

secretary shall be appointed by the directors and, subject to the provisions

of this section may be removed by them’.

It is disappointing that since the coming into force of the CAMA

2004 on the date above some directors of private companies in Nigeria

have hidden under the CAMA 2004 to remove secretaries of private

companies for alleged misconduct without giving them an opportunity

to defend themselves contrary to the rules of natural justice under the

common law3 and section 36(1) of the CFRN 19994 which guarantees to

all citizens of Nigeria the right to a fair hear ing.

The National Assembly of Nigeria is to blame for allowing this

problem to emerge, as its enactment, that is, the CAMA 2004 is silent on

the procedure to be followed by the directors in the removal of secretaries

of private companies for alleged misconduct. This is unlike the position

of secretaries of public companies, as section 296(2) of the CAMA 2004

provides the procedure to be followed by the directors in the removal

of secretaries of public companies for alleged misconduct. It accords the

secretaries of public companies the opportunity to defend themselves

before they can be removed by the directors for alleged misconduct. Thus,

while the employment of secretaries of public companies is protected by

statute or with statutory flavour in Nigeria, the employment of secretaries

of private companies is not protected by statute or with statutory flavour

in Nigeria. This lacuna in the CAMA 2004 poses a grave danger to the

survival of private companies in Nigeria as it is prone to abuse as has been

the case in recent times.

This article examines the power of removal of secretaries of private

companies for alleged misconduct in Nigeria, analyses the relevant

statutory provisions and case law, highlights the practice in some other

countries and offers suggestions, which if implemented could ensure that

secretaries of private companies in Nigeria are not removed for alleged

misconduct without giving them an opportunity to defend themselves.

1 Cap 59 Laws of the Federation of Nigeria (LFN) 1990.

2 Cap C 20 LFN 2004. This Act is an Act to establish the Corporate Affairs Commission (CAC),

provide for the incorporation of companies and incidental matters, registration of business

names and the incorporation of trustees of certain committees, bodies and associations.

See Preamble to the Act.

3 Note that the common law, doctrines of equity and statutes of general application applicable

in England as at 1 January 1900 are part of the received English Law in the Nigerian Legal system.

See, for example, s 32(1) of the Nigerian Interpretation Act Cap 123 LFN 2004.

4 Cap C 23 LFN 2004.

© Juta and Company (Pty) Ltd