This thesis provides a comparative analysis of the problems of fraud and the abuse of the corporate form under UK and Nigerian company laws. The twin doctrines of separate legal personality and limited liability for members shield shareholders and directors from personal liability for the debts of the company with far reaching implications for creditors and wider society. Although this position is not immutable as demonstrated in Salomon v Salomon, an analysis of case law and statute within the general rubric of ‘lifting the veil’ or ‘piercing the veil’ in the two jurisdictions reveals that veil piercing approaches have for several reasons remained fundamentally flawed. There is no coherent principle upon which the courts may find exceptional circumstances to impose liability on shareholders and directors. Veil piercing approaches have been premised on loss allocation analysis and used only as a means to discard limited liability. No effort has been made to deny controlling shareholders and directors the benefits derived from fraud, an omission that is detrimental to the interest of creditors and thus demonstrates the need for a new approach. This thesis therefore argues that gains made by fraudulent shareholders or directors constitute an unjustified enrichment which must be disgorged for distribution to creditors. To this end, the thesis proposes a ‘responsible corporate personality model’ which gives the creditors wider rights of action to initiate claims against corporate controllers to deny or prevent wrongful benefits or proceeds of unjust enrichment when the company is insolvent or approaching insolvency. The model addresses questions such as the role of constructive trust in combating fraud, tracing, fraudulent transfer of company’s assets to third parties and obstacles imposed by the requirement of fiduciary relationship. It supports the approach to unjust enrichment, suggesting lessons for both the UK and Nigeria in order to preserve equity and prevent improper conduct of corporate controllers. A key argument is that the responsible corporate model can address certain socio-economic peculiarities of Nigeria and similar developing countries.
| Identifer | oai:union.ndltd.org:bl.uk/oai:ethos.bl.uk:595774 |
| Date | January 2013 |
| Creators | Uzoechi, Kenneth |
| Publisher | University of Warwick |
| Source Sets | Ethos UK |
| Detected Language | English |
| Type | Electronic Thesis or Dissertation |
| Source | http://wrap.warwick.ac.uk/59929/ |
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