LCCI wants National Assembly to discard Private Companies’ Conversion and Listing Bill

The Lagos Chamber of Commerce and Industry has called on the National Assembly to discard the Private Companies’ Conversion and Listing Bill, 2013.
The LCCI made the call in a statement signed by its Director-General, Muda Yusuf, and made available to newsmen on Saturday in Lagos.
The chamber said it rejected the bill in its entirety because it would serve as a disincentive to entrepreneurship and foreign investment.
It said that the bill signified a drastic shift in Nigeria’s policy on foreign direct investment.
The statement said: “A lot of companies have come into Nigeria in the belief that Nigeria operates a free enterprise system and guarantees them the right to own and repatriate their hard earned funds.
“The bill destroys this concept of free enterprise in Nigeria and has the undesirable consequence of dis-incentivising foreign investment in Nigeria.”
The News Agency of Nigeria reports that the bill is being sponsored by Rep. Chris Azubogu, the Vice Chairman of the House of Representatives Committee on Capital Market.
The bill seeks, among other things, conversion to public liability companies of private companies which shareholders’ funds exceed N40 billion or annual turnover exceeds N80 billion or the total assets above N80 billion.
It seeks that shares of such companies should be listed on the Nigerian Stock Exchange.
The LCCI said that the listing requirements of the bill were ill-timed in view of the falling oil prices and the need for the government to generate more revenue from taxes.
“The tax reliefs proposed by the bill to companies that comply with its mandatory conversion and listing requirements are not desirous at this critical moment, especially in view of the fact that companies that would benefit from the relief constitute about 32 per cent of diligent tax payers,” said the LCCI.
It noted that on January 27, it organised a stakeholder’s forum on the bill, which had scaled the second reading in the House of Representatives.
The chamber said the forum was attended by representatives of the Nigerian Stock Exchange and the private sector, including multinational companies.
LCCI said: “The bill contravenes the provisions of existing laws in Nigeria, which encourage the right to own property, movable or immovable.
“It also contravenes the right against expropriation of private property as contemplated by Sections 44 of the 1999 Constitution as amended and Section 25 of the Nigerian Investment Promotion Act, 2004.
“Section 25(1) (b) of the Nigerian Investment Promotion Commission Act, 2004 categorically provides as follows:
“No person who owns, whether wholly or in part, the capital of any company, shall be compelled by law to surrender his interest in the capital to any other person.”
The chamber, therefore, advocated creation of an incentive regime that would encourage voluntary listing on the Nigerian Stock Exchange.
It also called on the National Assembly to take steps to amend the Companies and Allied Matters Act, 2004.