Key highlight
- The court orders the winding up of Anyiam Osigwe Group Limited over its inability to pay a debt.
- This article highlights what the law says about winding up and the different ways a company can be wound up in Nigeria.
- It also shows the declaration of the judge regarding the winding up of Anyiam Osigwe Group Limited
On Thursday, A Federal High Court in Lagos ordered the Winding Up of Anyiam Osigwe Group Limited.
Justice Ayokunle Faji gave the order following the company’s inability to pay a debt of N750 million owed to First Bank of Nigeria (FBN) Plc since November 2006.
In Nigeria, winding up Is primarily governed by the Companies and Allied Matters Act (CAMA) and section 401 CAMA provides for the various ways a company can be wound up.
Court order
in suit no: FHC/L/CP/925/14 Justice Faji held that the petitioner had proved before the court that Anyiam Osigwe Group Limited was unable to pay its debt pursuant to Section 408(d) of the Companies and Allied Matters Act, 2004.
Consequently, the judge said: “In the instant case, the respondent (Anyiam Osigwe Group) has not said that it has paid the entire sum due. It has not even shown that it has paid the principal sum of N750,000,000. It has only alleged paying N230,000,000.
“Even though a court should not hastily grant a winding up order, where there are strong grounds for doing so, particularly where the dispute as to the debt is not on substantial grounds, the Court will grant a winding up order.
“This Petition has immense merit and ought to and is hereby granted in its entirety.” The court declared.
What you should know
As stipulated under Section 401 CAMA, A company can be wound up by either Order of Court, Voluntary Winding-up, or Winding-up by Supervision of a Court
- In the case of Anyiam Osigwe Group Limited, the company was wound up by a court order.
- Winding-up by court order is commenced by a petition to the court for winding-up which must contain a statement on the nature of the claim made, the relief sought, and an affidavit of non-multiplicity of action on the same subject matter.
- As stipulated by CAMA, the petition is to be served not less than 7 days before the day fixed for hearing of the petition.
- Section 570 of the CAMA confers on the Federal High Court the jurisdiction to wind up a company in certain circumstances.
- Reasons, where a court can grant an order for Winding up as provided under CAMA, include the inability of a company to pay its debts, failure to hold statutory meetings or deliver statutory reports to the Corporate Affairs Commission (CAC), and where the number of the members of the company reduced below 2 in the case of companies with more than one shareholder,
- Voluntary winding-up is a self-imposed liquidation process approved by the shareholders to terminate the life of a company which can be effected either as a Members Voluntary Winding-up or Creditors Voluntary Winding-up.
- Winding-up by Supervision of the Court is when a company passes a resolution to voluntarily wind up itself and petitions the Court to supervise the winding-up.