What Nigerians need to know about the new Corporate Corruption Act
Under the newly proposed bill for the Corporate Coruption Act, a Company or its Principal Officers, acting in furtherance of the Company’s purpose, is convicted of a scheduled offence involving the corruption of a Public Officer. Where the offence involves giving or taking bribe up to N1 million or more, the company will be liquidated.
However since public companies have shareholders who are not involved in management, the employment of the board of directors may be terminated instead of a liquidation, while the main controlling shareholders lose their investments.
The act which applies to all Companies registered with the Corporate Affairs Commission under the Companies and Allied Matters Act
Laws of the Federal Republic of Nigeria 2004 (CAMA), is set to make provision for corporate liability. It also addresses the corruption of a public officer in proceedings outside Nigeria, provided that where foreign currency is involved, the value of the inducement or benefit must, at the date of the offence, satisfy the minimum threshold prescribed by the Act.
Compulsory liquidation of companies
In business, liquidation is the process by which a company (or part of a company) is brought to an end, and the assets and property of the company are redistributed. In this case, a company which is liquidated in accordance to the provision of this Act will follow all stipulated rules in priority to the provisions of the CAMA. These rules are primarily aimed at securing the overall public interest, interests of company’s customers and the staff of the company( unless provided these staff fall within the category of people who have the power to set a policy).
However this can only be commence after some conditions precedent are met. These include: conviction by a Superior Court of Record, no pending appeals against the conviction–the most recent appeal or delivery of judgement must have been at least 45 days beforehand.
Any such company liquidated pursuant to this Act shall be administered by the liquidator or team of liquidators who will hand over to a new board of Directors appointed by the new shareholders of the Company. While the Federal Attorney General as well as the Attorneys General of each state have the authority to publish in the Official Gazette, as well as in the mass media the name and contact details of a responsible officer.
Compensation for whistle-blowers?
In a situation where records of suspicious transactions under this Act, was supplied by whistle-blowers or other sources, there will be financial compensation and reward in favour of whistle-blowers. However no person shall be entitled to whistle-blowers compensation unless a documented report has been made by such person to a scheduled officer, leading to a conviction under the Criminal Code or any other law relating to fraud, bribery or corruption.
Any attempt to victimise or harm these protected individuals will be considered a criminal offence. But any person who concocts false information against a company for the purposes of this Act with the intent to profit under the whistle-blower compensation provisions is also guilty of an offence.
While offences committed prior to the commencement of this Act may be overlooked, any person guilty of holding, transferring or disguising the transfer of funds or benefits from a corporate body to a public officer shall forfeit all assets, whether or not such these are connected to the relevant transaction.
There will be no alternative of a fine where the offence involves the offer or payment by the company of a bribe is valued at N1 million or above. The court however has power to impose unlimited financial penalties (including the tracing and confiscation of assets) to ensure that no persons or companies retain the benefits and proceeds of corruption.
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