Media trial has become the order of the day. Is it right? The

Constitution of the Federal Republic of Nigeria 1999

presumes everyone who is accused of a criminal offence to

be innocent until proved guilty. This menace has caught the

attention of our Legislative and Media Practice Group. Also

our Regulatory Compliance and Business Advisory Practice

Group has taken a look at the proposed increase in

electricity tariffs by NERC as well as the safety of road

users, having regard to incessant incidents of objects falling off trailers in recent times.

Company Directors and shareholders will also find useful the piece on the consequences

of failure to file annual returns, which was put together by our Commercial Law Practice

Group.

I hope you enjoy this Issue.

Tayo Oyetibo, SAN

FROM THE CHIEF COUNSEL...

FROM THE EDITORIAL TEAM...

In this edition, we have looked at various aspects of the ever-evolving Nigerian business

landscape: from the controversial proposed increase in electricity tariffs to the threat by

the Corporate Affairs Commission to strike out defaulting companies from its

Register, to the seemingly intractable issues of trial by the media and very

importantly life-threatening road safety issues.

We hope you will find the contents of this Issue informative and useful. Questions or

comments are welcome at newsletter@tayooyetibolaw.com.

VOLUME 1 ISSUE 9

THE

TOKEN A Newsletter of Tayo Oyetibo & Co

IN THE NEWS

Nigerian Communications

Commission fines MTN Nigeria

Limited N1.04 trillion ($5.2

billion) for failure to deacti-

vate unregistered SIMs and

incomplete SIM card details on

its network

Financial Reporting Council of

Nigeria fines Stanbic IBTC

Holdings Plc One Billion Naira

over alleged irregularities in

Financial Statements.

Federal Government has no

plans to devalue the Nigerian

Naira

Commencement of Mandatory

use of National Identity Num-

ber moved to 9th January,

2016

IN THIS ISSUE

CRISIS IN ELECTRICITY SECTOR:

“DISCOs vs CONSUMERS!”

CAC THREATENS TO STRIKE OFF

DEFAULTING COMPANIES

THE MENACE OF MEDIA TRIAL

IN NIGERIA

FALLING OFF OBJECTS: HOW

SAFE ARE ROAD USERS?

2

3

4

5

CRISIS IN ELECTRICITY SECTOR: “DISCOs vs CONSUMERS!”

The Nigerian Electricity Regulatory Commission (NERC) established under Section 31 of the Electric Power Sector Reform Act 2005, (The Act) is saddled, amongst other duties, with establishing a methodology for the review of electricity tariffs chargeable by Electricity Distribution Companies (DISCOs) in Nigeria. There has been a persistent call by the DISCOs for an increase in electricity tariffs on the ground that their businesses are being run at a loss largely due to defaults in payment of electricity bills by consumers and rising costs.

In the recent past, there have been many controversies, disputes and litigations over the increase of electricity tariffs in Nigeria by the NERC through its 2015 Multi Year Tariff Order (MYTO 2.1). Some of the controversies that have arisen from the MYTO have revolved around claims by electricity consumers that the NERC failed to consult consumers and other stakeholders prior to the tariff increase. Further controversy has however been generated by the DISCOs’ proposed review of over forty percent (40%) in tariffs, which they deem to be the adequate reflection of their costs of distributing electricity to consumers.

Under the MYTO being applied by the NERC, electricity tariffs may be reviewed by the NERC where there are material changes to the inflation rate, exchange rate, actual available generation capacity,

forecast of capital expenditure on the network or the forecasts for energy transmitted through it and cost of fuel (gas price), which are key indices used in the calculation of electricity tariffs. A material change is considered to be a plus or minus 5% (five percent) variation in these indices.

There is no doubt that some of the key indices stated above have undergone material changes since the last MYTO 2.1 (amended) was issued by the NERC as, for example, there have been unpredictable fluctuations in the exchange rate of the Naira.

Whether the NERC will reduce tariffs if the exchange rate reduces significantly remains to be seen. While it is gratifying to note, that the NERC is yet to approve the increases proposed by the DISCOs, it is nonetheless clear from the ‘body language’ of the NERC and the DISCOs that electricity consumers must begin to brace up for an increase in tariffs. Of greater concern is the fact that there has not been any suggestion from either the DISCOs or the NERC that there will be any substantial increase in the regularity of electricity supply which is more important to electricity consumers. The question then arises: Who will protect electricity consumers in this country?

These are germane issues that bother the average electricity consumer in Nigeria.

Page 2

THE TOKEN VOLUME 1 ISSUE 9

“There has not been

any suggestion from

either the DISCOs or

the NERC that there

will be any substantial

increase in the

regularity of electricity

supply...”

CAC THREATENS TO STRIKE OFF DEFAULTING COMPANIES

The Registrar General of the Corporate

Affairs Commission (the Commission),

Mr. Bello Mahmud recently disclosed that

49% of companies registered in Nigeria

have defaulted in filing their annual returns.

Mr. Mahmud also pointed out that, as a

consequence of such default, the

Commission would soon delist about 50,000

registered companies.

By virtue of sections 370-378 of the

Companies & Allied Matters Act (CAMA),

companies registered in Nigeria must file

annual returns with the Commission not later

than 42 days after their Annual General

Meetings.

Apart from the fact that through the filing of

annual returns, revenue is generated to the

government, filing of annual returns is also

an important way for the Commission, as a

regulator, to know how well a company is

performing and monitor compliance with the

provisions of CAMA. While filing annual

returns, certain documents, such as

Financial Statements and other reports,

which reflect the performance of companies,

are required to be submitted to the

Commission.

The ultimate penalty for a company’s default

in filing annual returns is the striking off of

the company’s name from the Register of

Companies at the Commission. The

Commission can, however, only strike off

the name of a company when it has reason

to believe that the company is no longer in

operation or carrying on business. To do

this, the Commission must first send two

separate notices to such company requiring

it to disclose whether it is in operation or

carrying on business. If the Commission

does not receive an answer from the

company or receives a response from the

company stating that it is not carrying on

business, then the Commission is to give a

three month notice period in the federal

Gazette of its intention to strike off the name

of the Company from the Register of

Companies.

Where a company is struck off the Register

of Companies, the legal effect is that the

company becomes non-existent in law.

However, such company can apply to the

court, within 20 years of being struck off the

Register, for an Order restoring the

company to the Register.

Many private limited liability companies in

Nigeria fail to file annual returns with the

Commission and are therefore at risk of

being struck off the Register of Companies,

should the Commission carry out its threat. It

is important that companies take steps to

regularise their records with the Commission

because, one of the legal consequences of

the striking out of the name of a Company

from the Register of Companies is that such

a Company would lose its legal capacity to

enter into binding agreements.

Another consequence is that the Bankers of

such companies may disallow access to the

funds in such companies' accounts on the

ground that they are non-existent in law.

There are therefore wider legal and

economic implications arising from the

striking off of the name of a company from

the Register of Companies by the

Commission.

Page 3

THE TOKEN VOLUME 1 ISSUE 9

“Many private limited

liability companies in

Nigeria fail to file

annual returns with

the Commission...”

THE MENACE OF MEDIA TRIAL IN NIGERIA

In recent times, the practice of law enforcement agents parading before the media, persons suspected of commission of crimes, has become widespread. The media, as well, in their drive to catch public attention may often publish the news of such arrest in a sensational manner, giving the unsuspecting public the impression that the suspects are already guilty even though the law presumes them innocent, having not been convicted. This is what is colloquially referred to as “media trial”.

The damaging effect of this practice is that the judicial process that may subsequently be initiated to try the suspects might have been inadvertently compromised. Some of the several scenarios that could occur, during and after the trial, include:

The prosecutor could be put under immense pressure to secure conviction because prior to the trial, the media had already painted the accused person as guilty. This would mean that even where a prosecutor prosecutes diligently and the court ultimately finds the accused person(s) not guilty, he (the prosecutor) may be accused of ineptitude or having compromised the case even though the acquittal was due to lack of evidence and not lack of diligence or corruption on his part. On the flip side, public pressure may overwhelm the prosecutor into seeking a

conviction at all cost. He may thus unwittingly constitute himself into a persecutor and not a prosecutor.

Again, in certain circumstances, when a case has attracted wide media coverage before the commencement of trial, which has made the accused person appear guilty in the eyes of the public, a subsequent acquittal of the accused person upon conclusion of trial, may suggest that the judgment is of doubtful authority. Furthermore, despite acquittal due to lack of evidence, the accused may still not leave the court a better person because his reputation might already have been damaged by the media trial which had portrayed him to the public as being guilty.

On his part, a Judge handling a sensationalized criminal case may also be under undue pressure to return a verdict of guilty against the accused person who, prior to the trial, had been presented to the public as being guilty. In such a situation, the possibility of a conviction of the accused person even though there may be insufficient evidence, cannot be ruled out. On the other hand, a Judge who acquits an accused person under those circumstances, may be accused of having been compromised and may be widely derided even if he had acted rightly.

The cumulative effect of the foregoing is that the confidence of the public in the judicial system may be eroded over time when the results of criminal trials turn out to be different from the anticipated outcome which prior media trial had created in the mind of the public. Consequently, there is a greater risk of people resorting to self-help in dealing with persons suspected of having committed criminal offences instead of allowing the law to take its normal course of criminal trial. Herein lies the danger attendant in “media trial”. It is hoped that law enforcement agents and the media would see the danger inherent in this vice and desist from it.

Page 4

THE TOKEN VOLUME 1 ISSUE 9

“The prosecutor could

be put under immense

pressure to secure

conviction because

prior to the trial, the

media had already

painted the accused

person as guilty”

FALLING OFF OBJECTS: HOW SAFE ARE ROAD USERS?

There have, of recent, been an upsurge in

cases of objects falling off trailers/trucks and

occasioning avoidable loss of lives and

damage to properties. A recent example

was the incident which occurred in Lagos,

the commercial capital of the nation, when

an unfastened container fell off a trailer/

truck which was conveying the container

across a flyover bridge in a bustling part of

the city. The unfastened container which

was loaded with goods came off the trailer/

truck which was being driven along the

flyover bridge and fell on a motor car that

was being driven along the exit road,

leading to loss of lives. This type of accident

is one too many and future occurrences

ought to be prevented by strict enforcement

of applicable laws and road traffic

regulations.

There are several laws, in Nigeria, which

regulate road safety and in particular

carriage of heavy goods by road. For

example, the National Road Traffic

Regulations 2012, made by the Federal

Road Safety Commission, provide

operational requirements on road safety.

Regulations 94(e) and 150 (3) of the

Regulations place an obligation on drivers of

heavy goods vehicles to ensure that any

freight or load carried is secured in a

manner as to make it impossible for such

freight or load to fall off while in motion.

While there is no particular penalty for

contravening the foregoing provisions, the

Regulations provide for a general penalty of

N2,000 for a breach of any of its provisions

or a 3-month term of imprisonment or both.

The Regulations also mandate the driver of

a trailer transporting hazardous goods to

ensure that the container holding the goods

is fitted with holding twist locks or other

equipment for the purpose of securing the

container to the vehicle. Failure to comply

with the foregoing provisions attracts the

payment of a fine of N5,000 upon conviction

or imprisonment for nine months or both as

the case may be.

The paltry nature of the fines and minimal

prison terms are certainly not

commensurate with the harm which usually

flows from a violation of the Regulations.

The Regulations ought to be amended to

impose stiffer penalties for breach of its

provisions.

The high risk posed by heavy-goods

vehicles, has also caused some States to

make Laws which restrict their

movement during the day. Section 2(i) of

the Lagos State Road Traffic Law 2012 (the

Law), for example, prohibits the

movement of trailers within the metropolis of

Lagos between the hours of 6:00am –

9:00pm but exempts petrol tankers and long

vehicles that are used to convey

passengers. According to the Law, Tour

buses, fire service trucks, rescue and

recovery trucks, patrol trucks, perishable

farm products trucks, refuse collection

trucks, cement mixer trucks tractors and

refrigerated trucks are not affected by the

restriction.

The Law empowers Government officials to

impound any vehicle contravening this

provision and the driver of such vehicle is,

upon conviction, liable to a penalty of

N50,000 or 6 months imprisonment. It is

hoped that appropriate Law Enforcement

Agents would step up the enforcement of

these laws and ensure strict observance by

drivers of all vehicles concerned. Page 5

THE TOKEN VOLUME 1 ISSUE 9

“The paltry nature of

the fines and minimal

prison terms are

certainly not

commensurate with

the harm which

usually flows from a

violation of the

Regulations”

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THE TOKEN VOLUME 1 ISSUE 9

THE TOKEN is designed to provide information of a general nature and is not intended as a substitute for professional or le-gal consultation or advice in a particular matter. The opinions and interpretations expressed within are those of the author only and may not reflect those of other identified parties. In no event will Tayo Oyetibo & Co be liable for any damages whatsoever arising out of the use of or reliance on the contents of this Newsletter. The Newsletter is for private circulation to the addressees only and not for re-circulation. Any form of reproduction, dissemination, copying, disclosure, modification, distribution and/or publication of this Newsletter is strictly prohibited. This Newsletter is not intended to be an advertisement or solicitation.

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