Rivers State: Who can Prosecute ‘theft’ of a Company’s Equity?

Short answer: it depends on the property allegedly stolen. If it is money or a negotiable instrument, it appears that it is the EFCC, that is, the Economic and Financial Crimes Commission (the EFCC). In any other case, then any number of other agencies (the regular Police, State and Federal Attorney-Generals, etc). However, in the context of the directive recently given by the Rivers State Governor, Nyesom Wike, to the State Attorney-General to prosecute his predecessor, Rt. Hon. Rotimi Amaechi, and others, including the erstwhile CEO of Sahara Energy, Mr Tonye Cole, allegedly for diverting the value of 70% of the equity held by the State in a power generating company, (the First Independent Power Ltd.), the poser assumes a critical dimension.

State or Federal Crime?

Without getting into the apparent politics behind the directive (it is an open secret that there is no love lost between the former Governor and the incumbent), it is worth interrogating the legality – or even constitutionality – of the said directive vis-à-vis extant laws. To start with, it is clear that theft, embezzlement or criminal misappropriation, are ordinarily State – and, not Federal – crimes. This general principle is, however, tempered by the exclusive power which the Constitution gives to the National Assembly (under Sections 4(3) and 15(5) and Item 68 of the Exclusive Legislative List, as well as Paragraph 2(a) of Part III of the 2nd Schedule) thereof,  respectively, to abolish corrupt practices/abuse of power and to enact criminal legislation in respect of the 67-odd matters in the Exclusive Legislative List of the Constitution over which the National Assembly exercises exclusive legislative authority. 

One of such matters is contained in Item 32, namely, the incorporation and regulation of bodies corporate, other than those directly established by any law enacted a State House of Assembly. If (as it appears is the case) the First Independent Power Ltd., was incorporated under the erstwhile Companies and Allied Matters Act of 1990, this, to my mind, brings the alleged diversion, misappropriation or sale of the value of its equity within the purview of the National Assembly. However, the broader question is whether, at all events, such a crime was created by a law enacted by either the National and/or a State (in this, case, Rivers) House of Assembly?. 

Is alleged embezzlement or outright theft by public officials and others of the proceeds of the sale of the equity held by a State in an electric power generating/distributing company registered under a Federal law (as the First Independent Power Ltd. apparently was, at all material times) a Federal and/or a State crime? That is the question. If the former is the case (that is, it was a federal crime, created by a federal law), the implication, in my view, is that the said directive issued by Governor to his State Attorney-General to prosecute Rt.Hon. Amaechi and others might be misplaced. This is because, by virtue of relevant provisions of the Constitution, only the Federal – as opposed to a State – Attorney-General, can prosecute Federal crimes. The said provisions are as follows:-

Section 221 (1) (a):

“The Attorney-General of a State shall have power to institute and undertake criminal proceedings against any person before any court of law in Nigeria other than a court-marital in respect of any offence created by or under any law of the State House of Assembly”. 

Section 174 (1) (a):

“The Attorney-General of the Federation shall have power to institute and undertake criminal proceedings against any person before any court of law in Nigeria, other than a court-marital, in respect of any offence created by or under any Act of the National Assembly”.

However, any attempt at resolving the poser presented in the title of this piece would be incomplete without referring to, at least, the following laws: the Rivers State Criminal Law (the Criminal Code in force in Rivers State), the State Procurement Act, the Companies and Allied Matters Act, the Economic and Financial Crimes Commission Act and, perhaps, the Independent Corrupt Practices Commission Act. While the first two were enacted by the Rivers State House of Assembly, the last three are Federal laws – enacted by the National Assembly.

One of these laws, in particular (the Economic and Financial Crimes Act), appears to support the view that theft, misappropriation or embezzlement of the value of a State-owned company’s equity is a Federal and, not a State, crime and, therefore, is under the prosecutorial powers of the EFCC/the  Attorney-General of the Federation, and not a State Attorney-General. This is because, Section 7(2)(f) of the EFCC Act provides, inter alia, that: “the Commission shall be the co-ordinating agency for the enforcement of the provisions of . . . any other law or regulation relating to economic and financial crimes, including the Criminal Code and the Penal Code”. 

Furthermore, Section 13(2)(a) of the EFCC Act gives the Commission the power to prosecute economic and financial crimes (as defined in Section 46 of the Act), including “fraud, embezzlement, looting and any form of corrupt practices”. These (collectively referred to as “theft” in the title of this piece), it appears, are what Governor Wike believes art. Hon. Amaechi and others perpetrated in relation to the sale and disbursement of the proceeds thereof of the State’s equity in the First Independent Power Ltd. The specific provisions of the Rivers State Criminal Law which might possibly have been breached in this regard, in my opinion, include Sections 419, 421, 422 and 423 of the Criminal Code. They all prohibit fraud and obtaining property by false pretences…

It can be seen that, whilst the aforesaid provisions of the EFCC Act are specific, those of the Criminal Code (and, thus of the State Attorney-General to prosecute crimes), are general. It is trite law that in such a situation, the specific provisions prevail over the general ones: specilibus generalia derogant: SCHROEDER v MAJOR & CO. (1989) 2 NWLR pt. 101 pg. 1, S.C.

As to the relationship between the Attorney-General of the Federation and the EFCC, Section 43 of the EFCC Act provides that “the Attorney-General of the Federation may make rules or regulations with respect to the exercise of any of the duties, functions or powers of the Commission under this Act”. One such  Regulation – made by the immediate past Attorney-General of the Federation, in 2011 – is still in force. To my mind, the implication of this is that, as between a State Attorney-General and a Federal Attorney-General, the latter occupies a position of pre-eminence over the former vis-à-vis the prosecution of economic and financial crimes in Nigeria. 

I believe the definition of that phrase (that is, “economic and financial crimes”) in Section 46 of the EFCC puts the issue beyond conjecture. It defines them as “the non-violent criminal and illicit activity committed with the objective of earning wealth illegally, either individually or in a group or organised manner, thereby violating existing legislation, the economic activities of government and its administration, and includes any form of fraud, narcotic drug trafficking, money laundering, embezzlement, bribery, looting and any form of corrupt malpractices, illegal arms deal, smuggling, human trafficking and child labour, illegal oil bunkering and illegal mining, tax evasion, foreign exchange malpractices including counterfeiting of currency, theft of intellectual property and piracy, open market abuse, dumping of toxic wastes and prohibited goods, etc.”. 

I submit that this definition is wide enough to capture the conduct alleged against Rt. Hon. Amaechi, et al, which Governor Wike has directed the Rivers State Attorney-General to prosecute. Can he do that under the law, as it stood at all material times? I doubt it. I believe that a dispassionate analysis of the relevant provisions will show that, when it comes to economic and financial crimes, the final say, in terms of their prosecution, lies with the Economic and Financial Crimes Commission, either acting independently or at the behest of the Attorney-General of the Federation.

Conclusion

If Governor Wike is serious about prosecuting anyone (not just Rotimi Amaechi) for any alleged economic or financial crime within the definition of Section 46 of the EFCC Act, either in connection with the disbursement of the proceeds of the sale of the State’s equity in the First Independent Power Ltd. (its four gas turbines), or otherwise, he should do so through the EFCC.

The Rivers State Attorney-General is legally and constitutionally incompetent, to execute that mandate. The latter’s power to initiate or undertake criminal prosecutions, is limited to non-economic or non-financial crimes created by any law made by the State House of Assembly – such as the Criminal Code or the State Procurement Act. Anything beyond that, would be ultra vires and invalid.