Yinka Ogunnubi Explains FRC Act Which Restricts GO’s Tenure To 20 Years.

Yinka Ogunnubi

In  a series of tweet (1 – 40), Yinka Ogunnubi, @yinkanubi examines the operations of the Jim Obazee-led Financial Reporting Council of Nigeria, FRCN.


I had the premonition that a controversy will be stirred once we got that famous breaking news that our beloved Daddy was “stepping aside”. The headline events of that last 24 hours confirms my fears. Let’s start by listing what is being said and implied so far.

That President Muhammadu Buhari’s Federal Government is “dabbling” into Church leadership – That the Governance Code has been suspended thus no need to comply. That the law is targeted at weakening the church and make it vulnerable to attack – That provisions of the code conflicts with Financial Reporting Council Act and CAMA

First and foremost, in 2011 the Senate passed the Financial Reporting Council of Nigeria, FRCN Bill which created d Financial Reporting Council, FRC.

The FRC replaced the defunct Nigeria Accounting Standard Board, NASB then under Jim Obazee who subsequently became FRCN Exec Secretary.

Under Act, the FRC (among others) was expected to  – ensure good corporate governance practices in d public/private sectors of d economy.

Its in this light that it set out in 2013 to put together a Governance code (Public, Private & NGO). A draft of which it released in 2015.

As expected, many stakeholders had issues with some provisions within the code but they were given the opportunity to make submissions.

The FRC was thereafter sued by some Pastors representing Pentecostal churches in July 2015.  They sought six reliefs among which were:

– a declaration that d Not-for-Profit Codes 2015 is illegal and unconstitutional because it amounts to duplication of d functions of the CAC.

– that d TOR in section1 as well as sections 8, 9, 10 & 37 are illegal and unconstitutional being inconsistent with section 7 & 8 of FRC Act

Needless to say the plaintiffs who claimed to be representing Pentecostals lost the case in court as the court ruled in favor of FRC.

In light of the court order in its favor, the FRC went ahead to release the Governance Codes effective from 17 Oct  2016.

It came with a mandatory compliance for Private Sector and a “Comply or Justify non compliance” for Not-For-Profit organisations.

Not long after the release, the Minister of Trade &  Investment was reported to have written or issued a query (depending on who you believe) to the FRC to suspend the code until all issues it raised concerning it are resolved. The Minister main queries were as follows:

  1. Was the Governance Code in line with the FRC Act?: The combined reading of Section 2(1) and 10(d) of the FRCN Act suggests that the Board will be responsible for d overall control of the Council & the Directorates. So how the Code passes the test of compliance with the Act given that the FRCN Board is yet to be constituted.
  2. Does the Code supersede any legislation or any other Code?: A subsidiary legislation cannot supersede a principal enactment.The Exe Sec was asked to explain the clear conflict(s) between the Code and various legislation inclusive of the FRC Act as well as others e.g. it implied d CBN will take on d burden of implementing d Code in d financial sector & it’ll also take precedence over the CBN Code.

I know that people have tried to link d fact the Minister of Trade is also a Pastor in RCCG to speculate on his true intentions, but to be fair to him there was nothing in his letter that suggested he was pushing a disguised church or RCCG agenda. Rather the contrary.

His letter was more in line with concerns of the private sector than it was about concerns of leadership and succession for the church.

The expectation within the fin sector was that with d Ministers’ letter, the code was suspended. Wrong. Turns out the Exe Sec dis-agreed.

The FRC refused to honor d suspension request on d basis that it was not gazette. We won’t have known this if not for Daddy GO’s decision.

With this evidence alone, we can perish the notion of “PMB admin is “Dabbling in Church Leadership to weaken it”. It’s clearly not true. If anything, the evidence available to us points to the PMB admin trying to ensure that the code in its present form is not implemented.

In fact, it appears that the FG might be under intense pressure to sack Jim Obazee because of some “EFCC troubles” of his own. Now, let’s go to the corporate governance codes (for Non-Profit) itself.

By and large what the code tries to do is to first enforce the min requirements of Part C of the CAC under which religious organisations are registered.

For instance, religious bodies are supposed to make Annual Returns of its Financial Statements to CAC after audit.

Not For Profits also needs to organize yearly Annual General Meetings where they present their annual financial statement to its members. It reinforces d legal fact that any entity that collects money must “render accounts”, whether a bank, a biz owner or a religious body.

There appears to be no dispute about this requirement even among religious organisations. However, there is the small issue of Tax.

Should religious organisations be taxed when they engage in “For Profit” activities even if that activity is for the benefit of the org?

Obazee and  his team says yes. They must be taxed if they engaged in activities designed to extract financial benefit. He put it like this “if they pursue non-charitable activities like running schools, hospitals, they’re to acct for them separately as profit-making entities”

  • Yinka Ogunnubi is the author of Honey is it in the Budget? Trainer, Facilitator, Public Speaker, Convener of #TheMan Event. Die Hard Gooner. Board Member AdoptACamp Nigeria.

Categories: Religion

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