Joint Directive on Share Transfers
The Nigerian Communications Commission (NCC) and the Corporate Affairs Commission (CAC) have issued a joint directive requiring telecommunications companies to obtain regulatory approval before carrying out share transfers or ownership changes involving 10 per cent or more of their share capital. The directive was announced in a statement signed by Nnena Ukoha, director of public affairs at NCC, and Rasheed Mahe, head of public affairs at CAC, on Sunday.
According to the agencies, any proposed transfer of ownership or control of shares amounting to 10 per cent or more of the total share capital of an NCC-licensed company must receive a 'Letter of No Objection' from the NCC before the CAC can register such changes. The requirement also applies to multiple share transfers that, when aggregated, exceed 10 per cent of a licensee's total share capital.
Legal Basis for the Requirement
The agencies stated that the requirement is pursuant to Section 90 of the Nigerian Communications Act 2003 (NCA 2003), Regulation 28(2) of the Competition Practices Regulations, 2007, and Regulation 42 of the Licensing Regulations, 2019. These provisions collectively empower the NCC to oversee and review transactions affecting licensees and promote fair competition.
“Effective immediately, any proposed transfer of ownership or control of shares in a licensee of the Nigerian Communications Commission, amounting to ten per cent (10%) or more of the total share capital, as well as any series of share transfers which, in aggregate, exceed ten per cent (10%) of the total share capital of the licensee, shall require a Letter of No Objection from NCC for the changes to be effected and registered with the CAC,” the agencies said.
Impact on Market and Investors
With the new measure, the CAC will ensure that all requests for changes in shareholding structures amounting to 10 per cent or more, submitted for registration by telecommunications companies, are duly supported by evidence of NCC's prior consent and approval. The requirement is designed to preserve a fair and competitive market structure within the communications sector, prevent direct or indirect anti-competitive practices, and strengthen regulatory oversight of significant changes in ownership and control.
According to the NCC and CAC, the measure will further promote transparency, investor confidence, and regulatory certainty, while safeguarding the long-term sustainability and stability of the industry. “The NCC and the CAC reaffirm their shared commitment to advancing a transparent, stable, and competitive business environment in Nigeria,” the statement stated.
Commitment to Collaboration
Both agencies affirmed efforts to continue working closely to promote regulatory certainty, ensure fair market practices, and support the orderly and sustainable development of Nigeria's communications sector. This joint initiative underscores the importance of regulatory coordination in maintaining industry stability and protecting consumer interests.
