Shareholding By A Public Officer

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The anti-corruption drive of the President Bola Ahmed Tinubu administration has received its first stress test arising from the crisis in the Ministry of Humanitarian Affairs...
Nigeria Corporate/Commercial Law
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The anti-corruption drive of the President Bola Ahmed Tinubu administration has received its first stress test arising from the crisis in the Ministry of Humanitarian Affairs, Disaster Management and Social Development ('MHADMSC'). The Special Adviser to the President on Media and Publicity, Ajuri Ngelale, recently announced that arising from allegations concerning the alleged misappropriation of N585,000,000 (Five Hundred and Eighty-Five Million Naira), the President has suspended the Honourable Minister of Humanitarian Affairs, Disaster Management and Social Development, Hon. (Dr.) Betta Edu.1 In the dying hours of the 8th of January, 2024, the crisis took a new turn, expanding its scope to affect the Honourable Minister of Interior, Hon. 'Bunmi Tunji-Ojo. It is alleged, that a company in which the minister is a shareholder – i.e., New Planet Project Limited – was one of the persons awarded a consultancy contract by the MHADMSC. Hon. Tunji-Ojo has since cleared the air, explaining that though he was one of the promoters and a director of New Planet Project Limited, he resigned his directorship in 2019, after he was elected to the House of Representatives, and he is no longer involved in the day-to-day running of the company.2

It is pertinent to state that while the Honourable Minister asserted and provided documentary proof that he had resigned his directorship, there was no indication that he divested himself of the shares he acquired as a promoter of New Planet Project Limited. Thus, the matter of legal concern then is: while serving as the Honourable Minister of Interior, and ipso facto a public officer, is it lawful for Hon. Tunji-Ojo to retain ownership of shares in New Planet Project Limited, a private company? This is the crux of our short piece.


To properly set the table, it is necessary to explain some fundamental principles of company law, relevant to the present discussion. To begin with, ownership of shares in a company – even controlling shares – does not make the shareholder the alter-ego or manager of the company.3 In law, a shareholder has no personal right to the property or funds of a company;4 a shareholder's rights are limited to the right to sell or mortgage his/her shares, receive dividends on the shares, and attend/vote at the meetings of the company.5 The enduring position of the law is that the management of a company is primarily vested in the board of directors.6 Accordingly, once a person resigns as a director of a company, he/she ceases to be part of the management team of the company.7

With this appreciation of the law, we turn to the question of a public officer owning shares in a private company. The Constitution of the Federal Republic of Nigeria, 1999 (as altered) ('the Constitution') prescribes a code of conduct for persons serving in the public service of the Federation, i.e., public officers. With respect to participation in private business, Paragraph 2(b) of the 5th Schedule to the Constitution provides that:

2. Without prejudice to the generality of the foregoing paragraph, a public officer shall not –

a. ....................................

b. except where he is not employed on full time basis, engage or participate in the management or running of any private business, profession or trade, but nothing in this sub-paragraph shall prevent a public officer from engaging in farming.

It suffices to state that Paragraph 2(b) quoted above is a reproduction of Section 6 of the Code of Conduct Bureau and Tribunal Act.8 Nevertheless, what is clear is that, what the law prohibits is a public officer engaging or participating in the actual management or running of a private business.9 What is apparent from our discussion of company law principles is that a pure shareholder is excluded from the ambit of this constitutional and statutory prohibition. This is because legally, a shareholder is not an officer of a company, and should not be involved in the running or management of the company.10

Authority for the proposition that shareholding simpliciter does not result in a violation of the Code of Conduct for Public Officers is the decision of the Supreme Court in Nwankwo v. Nwankwo (1994) 5 NWLR (Pt. 394) 153 at 166B – F, wherein His Lordship, Wali, JSC held as follows:

"Paragraph 2(b) of the 5th Schedule as worded and enacted cannot by any stretch of imagination be said to have intended to prevent any public officer, the respondent inclusive, - from acquiring interest in a private business like a partnership. What is prohibited by paragraph 2(b) to the Fifth Schedule is for a public officer to "engage or participate in the management or running of any private business, profession or trade". The intendment is not to prevent any person willing to serve as a public officer from merely having an interest in a private business. But what he cannot do is to be a public officer and at the same time hold a managerial or other position in such an undertaking or solely to run the same. This is to avoid the possibility of such an officer having a divided loyalty. If by the time the provision of paragraph 2(b) of the 5th Schedule came into force a serving public officer was engaged or was participating in "the management or running of any private business, profession or trade", all that was required of him was to resign from such a position and surrender its management or its running to another person or body. The provision does not prevent any public officer from acquiring interest simpliciter in a private business, profession or trade or retain any such interest that has already been acquired. I agree on this issue with the unanimous judgment of the Court of Appeal where Onu, J.C.A. (as he then was) in the lead judgment said -

"The learned trial Judge, in my view, fell into another serious error in that he appeared not to appreciate the line of defence adopted by the appellant that the Fifth Schedule did not operate to invalidate or nullify any existing right which he had in the Company and afortiori operated to preclude him from investing in it. If expropriation had been the intention of the framers of that Schedule, they would have said so in clear terms." [Emphasis is supplied]

The decision in Nwankwo v. Nwankwo is determinative of the question as to whether a public officer can invest in or own shares in a private company. The authors submit that so long as the public officer is not involved in the running or management of the private business, he/she is at liberty to own shares and invest in a private company, albeit with the concomitant duty to declare the shares or investment as an asset in the forms submitted to the Code of Conduct Bureau.11

In any event, following Section 16 of the Code of Conduct Bureau and Tribunal Act, complaints as regards breaches of the Code of Conduct for Public Officers are to be directed exclusively to and investigated by the Code of Conduct Bureau. It is also settled law that the only judicial body vested with the authority to make determinations that there has been a breach of the Code of Conduct is the Code of Conduct Tribunal.12


A review of the applicable law reveals that it is neither illegal nor unconstitutional for a public officer to own or retain shares in a private corporation. In law, a basic precept is that the law is to be interpreted and applied as written, as such, this is the position of the law until such a time as the Constitution is altered.

Hon. 'Bunmi Tunji-Ojo's ownership of shares in New Planet Project Limited does not constitute a breach of either the Constitution or the Code of Conduct Bureau and Tribunal Act. If the Honourable Minister has accurately stated that he is not involved in the day-to-day running of the organization, we are unable to see the basis on which it can be asserted that he has engaged in any malfeasance. While the political machinations are outside of the control of the law, it is hoped that the President will take the extant position of the law into consideration.


1. Deborah Tolu-Kolawole, "BREAKING: Tinubu suspends Betta Edu over N585m scandal", Punch (Online) ( (accessed: January 9, 2024).

2. Ogaga Ariemu, "Betta Edu scandal: What Interior Minister, Tunji-Ojo said over alleged N483 consultancy fee indictment" Daily Post (Online) ( (accessed: January 9, 2024).

3. Williams v. Adold/Stamm Int'l (Nig.) Ltd. (2022) 5 NWLR (Pt. 1822) 23 and Okomu Oil Palm Co. Ltd. v. Iserhienrhien (2001) 6 NWLR (Pt. 710) 660.

4. N.I.B. Invest W.A. v. Omisore (2006) 4 NWLR (Pt. 969) 172.

5. Kotoye v. Saraki (1994) 7 NWLR (Pt. 357) 414.

6. Section 87(3) & (4) of the Companies and Allied Matters Act, 2020 and Yalaju-Amaye v. A.R.E.C. Ltd. (1990) 4 NWLR (Pt. 145) 422.

7. Yesufu v. Gov., Edo State (2001) 13 NWLR (Pt. 731) 517.

8. CAP. C15, LFN 2004

9. See: Okoya v. Santili (1994) 4 NWLR (Pt. 338) 256 at 289F – H.

10. Willbros West Africa, Inc. & Ors. V. McDonnel Contract Mining Limited (2021) LPELR – 54544 (CA). However, if the shareholder is a person on whose customary instructions and directions the directors of the company act, he/she is no longer a pure shareholder, and might be considered a shadow director, see: Section 270(1) of the Company and Allied Matters Act, 2020.

11. Paragraph 11(1) of the 5th Schedule to the Constitution and Section 15(1) of the Code of Conduct Bureau and Tribunal Act CAP. C15, LFN 2004.

12. Ahmed v. Ahmed (2013) 15 NWLR (Pt. 1377) 274; Saraki v. FRN (2018) 16 NWLR (Pt. 1646) 405 and Aondoakaa v. Obot (2022) 5 NWLR (Pt. 1824) 523.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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