Historical evolution, nature and powers of the receiver in Nigeria

The concept of credit for business was alien to Nigeria until the establishment of banking institutions at the tail end of the 19th Century. Prior to the growth in trading activities from about 1861 in Lagos, the entire country was agrarian with bouts of illegal trafficking in persons and minor trading in basic consumer goods. The stoppage of slave trade made British merchants to shift to trading in raw materials like rubber, bauxite, iron for their nascent factories. Borrowing for agrarian products or subsistence was nealyr non-existent except for seedlings for land which was super abundant. Borrowing therefore was considered anathema or fraudulent and failure to repay loans usually resulted in slavery, ostracism, confiscation of wife and children of the defaulter. With the oil boom, businesses imbibed corrupt and extravagant practices, coupled with general illiteracy, tribalism, nepotism which affected business performance and loan repayment. It is not unusual for investors/shareholders to use corporate loans or other funds for unproductive activities like politics and for acquisition of more wives and ostentations living. This paper seeks therefore to trace the history of corporate borrowing in Nigeria within the local cultural milieu. Attempt has also been made to differentiate between the various types of receiverships, and the continued influence of equity rules. Also, the nature and basic powers of a receiver are analysed as there is still great confusion between a receiver and a liquidator. Also, the legal status of a receiver is examined to ascertain the reality and pragmatism of their neutrality in the discharge of their functions. In addition, the courts inherent powers to appoint receivers are re-examined.