LAGOS—THE Securities and Exchange Commission (SEC) has said that ongoing merger and acquisition moves by banks could be derailed by the courts. According to SEC, most of the banks that have announced their merger plans have not given the mandatory pre-merger notice to the Securities and Exchange Commission.
Making this disclosure in Bauchi, weekend, Mr. Sylvester Akele, Director, Merger and Acquisition Department, Securities and Exchange Commission said so far, no bank had notified the commission of its intention to merge. He said the law required merger companies to notify the commission for necessary action and that the legal requirement stipulated in the Nigerian statute book might delay or derail the process of merger and acquisition if the courts were not carried along and given enough time to do their bit of the process.
The court process needed for merger could be cumbersome and requires adequate time for court ordered-extra ordinary general meeting of merging companies to seek approval from shareholders who must give the companies majority support. He said if there was minority dissent, the process could still go on.
The SEC boss said: "Mergers and acquisitions in Nigeria are regulated by several laws which include: The Investments and Securities Act (ISA) No. 45 of1999; The Rules and Regulations of SEC pursuant to the ISA; The Companies and Allied Matters Act (CAMA) I 1990; The Banks and Other Financial Institutions Act (BOFIA) No. 25 of 1991; T he Insurance Act; Companies Income Act Cap. 60 of 1990; and Investments and Securities Act (ISA).
The ISA is the principal legislation regulating mergers, acquisitions and other forms of business combinations in Nigeria. Section 8(o) of the Act empowers the Securities and Exchange Commission to "review, approve and regulate mergers and acquisitions and all forms of business combinations."
It provides that the commission should prevent fraudulent and unfair trade practices relating to the securities industry. Perhaps, to ensure that these functions are carried out without inhibitions, the ISA mandates the commission to establish a specialised Department for "the purpose of regulating mergers, acquisitions, take-overs and other forms of business combinations.
It is in line with these that the commission has developed its rules, regulations, procedures and requirements.
