Insider Dealings in Nigeria
AYODELE DOYINSOLA .O
DEPARTMENT OF LAW
OBAFEMI AWOLOWO UNIVERSITY
ILE-IFE OSUN STATE
PROFESSOR M.T. OKRORODUDU-FUBARA
IN PARTIAL FULFILMENT OF THE COURSE “LAW OF BUSINESS ASSOCIATION” (BUL 502)
Concept of Insider dealing
One of the areas of company law in which the general equitable rules seem to be inadequate to protect the …show more content…
The court held that as a breach of his fiduciary duty as a director and so must refund the profit made back to the company.
These duties in a way, ought to prevent a director from involving in insider trading. Thus in Coleman v Myers the court held that the managing director and the chairman owe fiduciary duties to the shareholders which arose from the family character of the company and their high degree of insider knowledge and the way in which they conducted the take-over. Thus, the fiduciary duty alone suffice to explain why a director should not involve in capitalising upon unpublished price-sensitive information of a company. However, these common law rules could easily be set aside being mere courts decision in England. in the case of Nigeria Bank for Commerce v. Balogun, a latter case decided by the court of Appeal in Nigeria, the court held that a director is not in a fiduciary position to a shareholder. This must have prompted the inclusion of these common law duties of directors in the Company and Allied Matters Act.
The fiduciary duties of directors are generally codified. Section 279 to 283 deals with the duties of directors. The Act provides that the personal interest of a director shall not conflict with any of his duties as a director. Therefore, in the management of affairs of the company or in the utilization of the company’s properties, he shall not make any secret profit or