NIGERIA Communications Commission (NCC) said it will now bark and bite if any telecommunications company operating in the country fails to embrace the Corporate Governance Code for the industry.
This will signal the end of the two years of voluntary compliance and pave way for mandatory enforcement. Prof Garba Dambatta, executive vice chairman/CEO, NCC, at a “Corporate governance forum: Review of the industry code” in Lagos, said the Code was largely declaratory in nature and implementation was initially voluntary across the industry thus leading to violations.
Dambatta said enforcement of regulatory stipulation is a last resort, warning that once “you are operating in a market, the rule of engagement must be respected”.
He said the liberalisation of the telecoms industry opened investment opportunities for both local and foreign companies, contributing significantly to the country’s Gross Domestic Product (GDP).
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According to Dambatta, in recognition of the need to sustain the phenomenal success recorded in the industry and replicate the lessons learnt in other sectors that had gone through the “Boom and Bust” cycle, the Commission in 2012 set up a multi-stakeholder Corporate Governance Working Group (CGWG) with membership drawn from across the Nigerian telecoms industry, the Commission and Corporate Governance practitioners. The mandate of the Group, he said, was to determine the industry’s corporate governance needs and the best approach to be adopted in addressing them, adding that the CGWG developed the Code of Corporate Governance for the telecoms industry, which was published in 2014.
National Daily gathered some telecom companies have over the years regularly and consciously ignored sustained and systematic red flags as their promoters and managers diverted funds meant for expansion into frivolous projects like manufacturing, oil and gas, politics and so on.
The practise quickened the deaths of most CDMAs in the country because of the fraudulent and self-serving practices of some members of board and management and the overbearing influence of chairmen or MD/CEOs of CDMAs.
Experts also point at non-compliance with laid down internal controls and operation procedures, biased recruitment exercises and general lack luster management practices as some of the reasons why many other telecom companies have folded up.