COVID-19: THE RESPONSE OF BUSINESS REGULATORS IN NIGERIA

CORPORATE AFFAIRS COMMISSION (CAC)

CAC Public Notice issued on 26 March 2020

• Companies are encouraged to hold annual general meetings using proxies. The CAC guidelines for such meetings are:

• CAC approval must be obtained before such meeting by proxy is held.
• CAC representative(s) must be present to observe such meeting.
• The Meeting must only discuss the ordinary business of annual general meetings such as declaring a dividend, the presentation of the financial statements and the reports of the directors and auditors, the election of directors in the place of those retiring, the appointment, and the fixing of the remuneration of the auditors and the appointment of the members of the audit committee.
• Notice of meeting and proxy forms must be sent to every members of the company at the company’s expense. Evidence of postage or delivery of such notice must be given to CAC after the meeting.
• The notice should advise members that attendance will be by proxy with the names and particulars of proposed proxies listed for selection by members.

• The notice must be issued at the companies’ expense and stamp duties prepaid by the company. The proxies need not be members of the company.
• To determine quorum, each completed form will be counted as one. Guidance on quorum should be pursuant to the Company’s article or the Companies and Allied Matters Act Cap C20 LFN 2004 (CAMA).

• Application by companies for pre-approval of such meetings should be made to the Registrar-General via email – agabubakar@cac.gov.ng and rg@cac.gov.ng.

FEDERAL INLAND REVENUE SERVICE (FIRS)

FIRS Press Release on 6 April 2020

• The use of electronic platforms to file tax returns, pay taxes and apply for tax clearance certificates.
• Tax returns can be filed on the FIRS electronic platform by taxpayers already registered on e-filing platform or the tax returns can be submitted to the dedicated agency email addresses on the FIRS website.
• Waiver of late returns penalty for taxpayers who pay early but file later. Supporting documents can also be emailed to the dedicated email addresses or submitted later to the tax offices.
• Extension of the timeline for filing VAT from 21st of every month to the last day of the month.

Extension of the period to file personal income tax returns for foreign affairs, non- residents, military and police to 30 June 2020.

FIRS Press Release dated 30 April 2020

• Waiver of interests and penalties on outstanding tax debt/ arrears (due to desk review, tax audit and investigation) if such debt is paid in full on or before 31 May 2020.

NIGERIAN STOCK EXCHANGE COMMISSION (NSE)

NSE Response to COVID-19 issued on 23 March 2020:

• Additional 60 days extension to dealing member firms (DMFs) for submission of audited financial statements for the year ended 31 December 2019 which extension is effective from 30 March 2020 and ending on 29 May 2020.

• Extension of the deadline for completion and submission of the self-assessment forms of DMFs to 30 April 2020.
• Remote trading via NSE electronic platforms such as FIX protocol and XNET as all trading floors temporarily closed.
• Issuers to submit regulatory filings electronically via the Issuers’ portal (X-Issuer).
• Suspension of all physical meetings within the NSE premises with virtual meetings encouraged.
• Annual General Meetings (AGMs) must be conducted in compliance with the NCDC guidelines for safe gatherings.
• Any intention by an issuer to postpone its AGM which makes such AGM after 9 months from the end of its financial year or more than 15 months from the last AGM must be communicated to NSE.
• The notification to NSE must be within 10 business days of the deadline and must explain reasons for default. An announcement of this must be made in at least 2 dailies within 5 business days of receiving the NSE’s approval to make the announcement. CAC may only extend the 15 months period within which the next AGM must be held by a period not exceeding 3 moths.NSE Guidelines on Companies Virtual Meetings

• On 15 April 2020, the NSE issued guidelines on Companies Virtual Meetings for Board, Committee and Management Meetings, the summary of these guidelines is provided in our next article.

SECURITIES AND EXCHANGE COMMISSION, NIGERIA (SEC)

SEC Circular dated 24 March 2020:

• Electronic filing of applications. For registration of funds and other relevant filings, applications should be sent to cis@sec.gov.ng. For registration of securities, public offers, mergers and acquisitions, debt issuances, applications should be sent to offerapplications@sec.gov.ng.
• Indefinite suspension of new applications for registration of capital market operators (CMOs). Pending application and requests by CMOs for update of information should be sent to registration@sec.gov.ng.
• Electronic filing of returns for public companies should be made to quotedcoyreturns@sec.gov.ng.; for capital market operators, 5% and above shareholding and AML/CFT, the dedicated email addresses are stated in the March 24th , 2020 Circular of the SEC.

• 60 Days extension for public companies and capital market operators to file 2019 annual report and Q1, 2020 management reports.
• Indefinite postponement of the first Capital Market Committee Meeting of NSE for 2020, previously scheduled for 23 April 2020, and all other meetings.

SEC Circular dated 31 March 2020:

• Public companies should continue to make material disclosures to their investors on COVID-19 impact on their business operations.
• Public companies should also continue to disclose the trend and outlook for their company and updates on implementation of business continuity plans. These disclosures are to be published on the company website and other relevant media.
• Debt issuers are expected to continue to engage Trustees to ensure relevant disclosures are provided. Trustees are required to provide updates to the SEC accordingly.

CENTRAL BANK OF NIGERIA (CBN)

CBN Circular dated 16 March 2020:

• An additional 1 Year extension of the moratorium on principal repayments for CBN intervention facilities, effective from 1 March 2020.
• Participating financial institutions are required to provide new amortization schedules for the beneficiaries of various loans. Businesses affected by this should expect to get a new schedule of amortization schedules from the relevant financial institutions.
• Reduction of interest rates of CBN intervention facilities from 9% to 5% per annum, for 1 year, effective from 1 March 2020.
• Creation of a N50 Billion Targeted credit facility particularly for affected households and small and medium-sized enterprises (SMEs) including hoteliers, airline service providers and healthcare merchants. This credit facility is established by CBN through the NIRSAL Microfinance Bank.
• Establishment of a N100 Billion intervention facility in health care loans to pharmaceutical company practitioners intending to expand/build their drug and manufacturing plants as well as hospitals and healthcare practitioners intending to expand/build their health facilities to first class centers.

• Grant of regulatory forbearance to deposit money banks to restructure the tenor and terms of facilities to affected households and businesses particularly the oil and gas, agriculture and manufacturing sectors.
• Strengthening the CBN loan to deposit ratio (LDR) policy of growing credit to the economy and reducing interest rate. CBN will further support and consider additional incentives to industry funding levels to maintain the DMB’s capacity to direct credit to individuals, households and businesses. to extend more credit (low-interest and long- tenure) to the households and businesses.CBN Circular dated 27 April 2019

• The removal or lift of the temporary suspension of cheque clearing in Nigeria, effective from 28 April 2020. Deposit Money Banks are encouraged to advise their customers of this directive.

CBN Circular dated 29 April 2019

• Extension of the deadline for compliance with revised minimum capital categories of microfinance banks by 1 year such that the relevant revised capital threshold must be met by April 2021 and April 2020 respectively.
• This is applicable for all MFBs including National and State MFBs, MBS in rural, unbanked and underbanked areas and MFBs operating in urban and high density banked areas.Other Responses

• Unified exchange rate system for inter-bank and parallel market rates to ease pressure on forex earnings as oil prices plummet. CBN adopts a single window trade official rate of N360 to $1.
• For on-lending facilities financial institutions have been directed to engage International development partners and negotiate concessions to ease the pains of the borrowers.
• Provision of credit assistance for the health industry to meet the potential increase in demand for health services and products. This is by facilitating borrowing conditions for pharmaceutical companies, hospitals and practitioners.
• 3 Months repayment moratorium for all TraderMoni, MarketMoni and FarmerMoni loans.
• 3 Months repayment moratorium for all federal government funded loans issued by the Bank of Industry, Bank of Agriculture and the Nigeria Export-Import Bank.

NAFDAC Press Release dated 23 March 2020

• Products that are already being processed for registration and are necessary and critical to treat or curb COVID-19 will be expedited and given emergency approvals.
• Good Manufacturing Practice (‘GMP’) Inspection for local facilities will be limited. GMP inspection for foreign facilities is suspended.
• Applications for the registration of products deemed to have urgent public health impact will be processed and given conditional and limited approvals.
• Interface and engagement with NAFDAC relevant directories should be via electronic mails and other electronic platforms.NAFDAC Press Release dated 9 April 2020

• Reduction of the registration to approval time from 120 working days to 10 working days.

NAFDAC has processed 17 applications and granted conditional emergency use approval to 7 medical devices (COVID-19 Antibody and Antigen test kits, PPEs) companies.

DEPARTMENT OF PETROLEUM RESOURCES (DPR)

DPR Circular dated 30 March 2020

• Operators are to limit the number of personnel at project/construction sites.
• The current situation (COVID-pandemic) is considered “force majeure” to ensure the safety and welfare of all personnel and contain the spread.

CONCLUSION

Depending on the sector within which a business operates, it is prudent to understand these recent responses by business regulators so as to properly assess its impact. Compliance with these new directives should be top of mind as the ability to remain a responsible business will go a mile in eliminating disruptions from regulators for compliance.

The common trend of electronic interface with regulators is most likely here to stay. Businesses that can utilize this ease of engagement will be sure to reap its benefits re reduced costs and time.

The information and opinions in this publication are provided for general information only. They are not intended to constitute legal or other professional advice. If you would like additional information, please contact the writer at seun@sooloruntimehin.com.