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Definitions And Developments: Corporate Governance Implications Of Judicial Interpretation Of 'Public Interest Entities' In Eko Hotels Limited V. Frcn Fhc/l/cs/1430/2012

Posted By: Admin | 02.September.2019 |

The scope of the Financial Reporting Council of Nigeria (FRCN) powers and functions pursuant 1 to sections 7 and 8 FRCN Act - and the applicability of its section 77 compliance requirements for "public interest entities" to file returns with the FRCN to privately held companies - was recently put to the test in Eko Hotels Limited v. FRCN. 2 There, the Federal High Court (FHC, Abang J.) ruled that the FRCN can only regulate public interest entities and that its powers does not extend to private companies. He further stated that "Where a statute does not empower a statutory body to do certain things, such body cannot so act."

According to the Court, the FRCN cannot enlarge its powers to regulate private companies outside its purview. Whilst the FRCN has not apparently appealed against the decision, the ministerial proclamation of the Nigerian Code of Corporate Governance (CCG), 2018 on January 15, 2019 (as a prelude to its formal commencement), provides further guidance on construing the scope of FRCN regulatory oversight on public and private companies.

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