A member representing Oshodi Federal Constituency 1 of Lagos State in the National Assembly, Mr. Moruf Akinderu-Fatai, said he had concluded arrangement for the presentation of a bill that would impose stricter penalties on foreign companies which continuously flout Section 54 of the Company and Allied Matters Act.
The lawmaker, who spoke with our correspondent against the backdrop of the insignificant fine prescribed for defaulting companies, said increasing the fine would instill discipline and deter perpetual defaulters.
Section 55 of the extent CAMA recommends a fine of N2, 500 for defaulting foreign companies. But the lawmaker wants the penalty increased to as much as N500, 000 so as to ensure compliance with due processes.
According to a copy of the lawmaker’s proposal made available to our correspondent, some foreign companies are constantly in the act of contravening Section 54 of the operating guidelines of the CAMA because of the meagre fine stipulated for defaulters.
Section 54 of CAMA states in part, “Subject to Section 56 and 59 of this Act, every foreign company which before or after the commencement of this Act that is incorporated outside Nigeria and having the intention of carrying on business in Nigeria shall take steps necessary to obtain incorporation as a separate entity in Nigeria for that purpose.
“But until so incorporated, the foreign company shall not carry on business in Nigeria or exercise the power of a registered company and shall not have a place of business or address for service of document for business in Nigeria for any purpose….”
However, Akinderu-Fatai faulted the law, saying some foreign companies were comfortable with flouting the law by doing businesses in the country without due compliance because the penalty for defaulters as stated in section 55 was insignificant.
The lawmaker said, “In view of the global and national economic changes in the last decade, Nigeria has enjoyed a lot of Direct Foreign Investment and Indirect Investment. The profits harvested by the foreign partners in our various industries run into billions. Thus, the penalty imposed by CAMA for non-compliance with the provisions can be conveniently brushed aside.”
Source:http://www.punchng.com/Articl.aspx?theartic=Art20101026044760
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