NIGERIA Law and Practice Contributed by: Yeye Nwidaa, Mariam Olayinka Akinyemi, Toluwalase Oliver-Jude and Adedoyin Odekilekun, Jackson, Etti & Edu
5.5 Disclosure by Shareholders in Publicly Traded Companies In publicly traded companies, shareholders are required to disclose their shareholding interests when they acquire a significant percentage of the company’s shares. Under Nigerian law, par - ticularly in accordance with the Investments and Securities Act and relevant SEC regulations, any person who acquires 5% or more of a company’s voting shares must notify the company and the SEC within a prescribed period, typically within ten business days. Shareholders are also obliged to disclose any substantial changes in their shareholding, such as further acquisitions or disposals that alter their percentage of ownership. The company, in turn, must notify the relevant securities exchange and update its records. This disclosure framework promotes transparency, prevents insider trading and ensures that investors and regulators are kept informed about significant changes in the ownership structure of listed companies. The Persons of Significant Control Regulation is applicable to all companies, and requires a person with significant control (PSC) in a com - pany to disclose to the company the particulars of such control within seven days of acquiring such significant control. Companies must, in turn, notify the CAC within one month of receipt of the information, disclose the information in their annual returns to the CAC, and update their registers of members with the appropriate details. Significant control arises where a natu - ral person owns or controls at least 5% of the company’s shareholding.
bers present in person or by proxy or a member or members representing at least one tenth of the total voting rights of all the members having the right to vote at the meeting. 5.4 Shareholder Claims As a general rule, only a company can bring a claim against any form of breach committed against it by its directors. However, sharehold - ers may bring a claim on behalf of the company against the company and the directors under the following instances: • entering into any transaction that is illegal or ultra vires; • fraud against either the company or the minority shareholders where the directors fail to take appropriate action to redress the wrong done; • where a company meeting cannot be called in time to be of practical use in redressing a wrong done to the company or to minority shareholders; • purporting to do by ordinary resolution any act that by its articles or this act is required to be done by special resolution; • any act or omission affecting the applicant’s individual rights as a member; • where the directors are likely to derive a profit or benefit – or have profited or benefitted – from their negligence or their breach of duty; and • any act or omission where the interest of justice so demands. Shareholders may bring an action in court through a member’s direct action, personal or representative action, or derivative action.
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