TEXT OF PRESS BRIEFING BY THE DIRECTOR GENERAL, NIGERIAN COPYRIGHT COMMISSION, MR. AFAM EZEKUDE, ON THE DISPUTE IN THE GOVERNING BOARD OF COPYRIGHT SOCIETY OF NIGERIA LTD/GTE(COSON)
Following a breakout of dispute among some members of the Governing Board of the Copyright Society of Nigeria, (COSON) which arose from developments at the organization’s Extraordinary General Meeting (EGM) held on 19th December, 2017, the Nigerian Copyright Commission has observed that many interested members of the public, including some prominent members of COSON, have made comments and opinions in the popular and social media, some of which are inaccurate on facts, as well as misleading. These comments which came shortly after the Commission had made intervention in the matter with a view to restoring order and stability in the management of COSON, tended to give the impression that the Nigerian Copyright Commission was unduly meddling in the activity of COSON and acted in excess of its mandate and statutory authority. It has therefore become necessary for the Commission to state the true situation at COSON, and clarify its role as the statutory agency responsible for copyright matters, and a regulatory authority for the copyright industry in Nigeria, particularly with regards to the operations of Collective Management Organizations.
Sometime in December 2017, the commission received a petition dated December 20, 2017 from six (6) members/directors of COSON, requesting the Commission to, among others;
“probe the events of Tuesday, December 19, 2017 at the Extra Ordinary General Meeting of COSON that resulted in the sacking of the society’s management Board and the reinstatement of Chief Tony Okoroji as Chairman”.
On receiving the Petition, the Commission forwarded same to the management of COSON as well as Chief Tony Okoroji who was named in the Petition, for their respective responses. The Commission received a written response from the management of COSON dated January 3, 2018 and signed by its General Manager, Mr. Chinedu Chukwuji. There was however no separate response from Chief Tony Okoroji.
The Commission also sought and obtained other information relating to the subject matter of the petition from management of COSON.
The summary of the matter as distilled from the petition, submissions of the management of COSON and a report filed by the representative of the Commission in the Governing Board of COSON who observed all relevant processes, was that on 19th of December, 2017, at the Extraordinary General Meeting (EGM) of COSON, summoned for the purpose of approving royalty distribution, members of COSON in attendance, following a delay by the Chairman of the COSON Board, Mr. Efe Omoregbe to commence the meeting at the scheduled time, (even though he was at the premises of COSON), nominated one of the members, Sir Victor Uwaifo to chair the meeting as Protem Chairman. Shortly thereafter, and before any substantive business of the meeting was taken, the Chairman of the Governing Board of COSON, Mr. Efe Omoregbe, walked into the meeting and was accordingly introduced by the General Manager of COSON, and requested to make his remarks. It was reported that the Chairman was prevented from making the remarks and from assuming the presiding role at the meeting by some members, who created a rather chaotic scenario. Consequently, Sir Victor Uwaifo continued to conduct the meeting. Instead of proceeding with the business of the meeting for which due notice was given to members, Sir Uwaifo went on to introduce matters which were not listed in the agenda of the meeting, and which related to the issue of an earlier removal of Chief Tony Okoroji as Chairman of the Governing Board of COSON, by members of the Governing Board at a meeting of the Board held on December 7, 2017. Members present at the EGM purportedly went on to take a decision to invalidate the removal of Chief Okoroji as Chairman of the COSON Board, and reinstating him thereof. Subsequently, Chief Tony Okoroji assumed control of the meeting and steered further proceedings of the meeting, and in particular the adoption of a number of resolutions, including a motion purported to remove from the Governing Board of COSON six members of the Board who had voted to remove Chief Okoroji as Chairman of the Board. No vote was taken on any of the resolutions, and no record of such was made available to the Commission. These developments formed the basis of the petition by the six members of COSON Governing Board to the Nigerian Copyright Commission.
In addressing this petition, the Commission restricted its intervention to its regulatory powers under the Copyright Act, and the Copyright (Collective Management Organizations) Regulations 2007, which forms the basis of its authority to act, vis-à-vis a collective management organization. This is without prejudice to the fact that there were simultaneously, issues of infraction of the provisions of the Companies and allied matters Act.
The following considerations were the basis of the Commission’s actions:
a. COSON is a collective management organization, approved in 2007 by the Nigerian Copyright Commission pursuant to the provisions of the Copyright Act, Chapter C28, Laws of the Federation of Nigeria, 2004, and the Copyright (Collective Management Organizations) Regulations 2007.
b. As part of its obligations after being approved by the Commission, a Collective Management Organization is expected to strictly comply with the provisions of the Copyright Act, the Copyright (Collective Management Organization) Regulation 2007 and any directive issued by the Commission in line with its statutory powers. Five Directors of COSON submitted undertaking to this effect at the point of their approval, and such continues to be binding on COSON.
c. It is a fundamental requirement for approval of an organization to function as a CMO and for its effective functioning as such, that the organization has both a General Assembly of all its members and a working Governing Board. (see Regulation 1 (3) (b) of CMO Regulations 2007).
d. The Commission is empowered to approve the management of a CMO as competent to run the affairs of the organization as a Collective Management Organization (Reg. 1 (3) (d)).
e. The Copyright (Collective Management Organizations) Regulations 2007 makes provision for an organization seeking to operate as a CMO to submit to the Commission, the memorandum of association of the Company and the articles of association of the Company, both of which must be considered satisfactory in its provisions, before an organization is approved to function as a CMO. (see Regulations 1 (2) (b) & (c))
f. The memo and articles of association so submitted by a CMO are part of required standards of operations of a CMO in addition to the provisions of the Copyright Act Cap C28, LFN 2004, and the Copyright (Collective Management Organizations) Regulations 2007.
g. Non-compliance with the provisions of any of the stipulated requirements in the Copyright Act, CMO Regulations, and the Memorandum and Articles of Association of the Company may render the operations of a CMO subject to possible sanctions under the CMO Regulations.
h. The Commission has General Powers to issue directives to a CMO in terms of its obligations under the Copyright Act and CMO Regulations, and failure to comply with such directives may be a ground for sanctions of the CMO or its officers, including suspension or revocation of operating licence. (See Regulations 2 (a) and 19 (1) – (4))
A review of the proceedings of the COSON EGM of 19/12/17 clearly indicated breaches of provisions of the COSON Articles of Association which is its internal rules of governance filed and approved by the Nigerian Copyright Commission at the time of approving COSON. Contrary to requirement of the Articles of association of COSON, the proceedings at the EGM went beyond the special business for which due notice was given. The meeting was misguided to take resolutions for which no notice was given, and which were not only outside the scope of the meeting, but also in excess of the powers of an Extraordinary General meeting. The purported removal of some members of the Board for instance, were done in gross violation of the provisions of the articles of association of COSON as well as the general corporate governance law, as there was no formal notice of the resolution to that effect, neither was any of the directors concerned notified prior to the meeting that such a resolution was intended to be moved at the EGM. No vote was taken on the said resolution, and no records of such votes are shown in the report made available to the Commission by management of COSON.
The Commission also observed that after the EGM, the management of COSON published and circulated names of persons said to constitute a new Board of COSON. Aside the fact that these persons were basically hand-picked, It is clear from the records of the meeting made available to the Commission by management of COSON, that there was no election of Directors at the EGM of 19/12/17. Assuming, there was such an election, the fact remains that it is not the business of an EGM to appoint members of the Board, as the articles of association of COSON clearly states that Directors are elected at an Annual General Meeting of the Organization.
Taking cognizance of the foregoing, and the need to ensure that due processes are maintained in the management of COSON in line with the dictates of its governing rules and extant laws and regulations, the Commission directed the management of COSON;
a. not to give effect to resolutions taken at the Extraordinary General Meeting held on 19th December, 2017, except the resolution on distribution of royalties to members, which was within the legitimate process of the meeting;
b. to convene its annual General meeting (AGM) within 60 working days and elect Directors/Governing Board in line with the provisions of its articles of association; taking into account the relevant articles in respect of qualification of directors;
c. to appoint a competent Professional who shall henceforth be the Company Secretary/Secretary of the Governing Board.
Following the issuance of the above directive, the Commission received a letter dated February 21, 2018 from the General Manager of COSON, informing the Commission that it (COSON) and Chief Okoroji had filed a suit in the High Court of Lagos State, claiming for, a declaration that Mr. Efe Omoregbee, the defendant was not the Chairman of COSON, as well as injunction to restrain the defendant from parading himself as the Chairman of COSON..
It is pertinent to note that the Commission is not named as a party in the above mentioned suit. Also, no injunction has been issued to restrain the Commission from the performance of its statutory functions, vis-à-vis COSON or any other Collective management organization.
Besides the letter of February 21, 2017, the Commission has also noted with concern that its directive issued to the Management of COSON in respect of the purported resolutions at the Extraordinary General meeting held on December 19, 2017 has not been complied with by management of COSON. Instead, some members of COSON have taken to social media platforms to peddle falsehood as well as other negative campaign against the person of the Director General of the Nigerian Copyright Commission, Mr. Afam Ezekude.
The development in its entirety does not augur well for the development of copyright administration in Nigeria. Aside undermining the efficient administration of COSON, the development affects right owners who may as a result be denied their legitimate royalties and sound protection of their rights. The ongoing rivalry in the COSON Board, will, without any doubt, hamper its effective performance on its primary mandate of licensing and collecting royalties. The essence of collective management is to bring the benefit of the copyright system to right owners. Moreover, as COSON is also a member of a number of international copyright organizations, the situation will not only expose COSON, but the entire Nigerian Copyright system to ridicule and embarrassment.
The main function of COSON as a collective management organization is to negotiate and issue licenses to users of musical works and sound recordings in Nigeria, collect royalties (money) for such licenses and distribute the monies collected to the owners of copyright in the works which it manages. The moneys that COSON collects belong to owners of copyright in music and sound recordings who are both Nigerians and foreign right owners. COSON is accordingly in a position of trust vis-à-vis its members. As a result of this unique status, the Copyright Act, Chapter C 28, Laws of the Federation of Nigeria 2004 and the Copyright (Collective Management Organization) Regulation 2007 make extensive provisions to regulate the operations of organizations that operate as collective management organizations, including COSON. The Nigerian Copyright Commission is the agency, mandated by law to carry out oversight on Collective Management Organizations. It has in that regard, regularly inspect operational books and accounts of COSON, and other regulatory measures to guaranty a transparent and accountable regime of collective management, including issuance of renewal of COSON license, after every two years. The Powers of the Commission are clearly provided for in the Copyright Act and the Copyright (Collective management Organization) Regulations 2007.
As a responsible agency of government, with a clear mandate under the law, the Commission will not allow unnecessary rivalry and personality clashes, which seemingly fuelled the present conflict at COSON, to interfere with the rights of Nigerian Creators to have their rights managed in a transparent and credible manner. Consequently, the Commission shall take appropriate steps to ensure that the directive given to management of COSON is duly implemented.