Section 839 CAMA 2020

Section 839 Companies and Allied Matters Act is about Suspension of trustees,etc., and appointment of interim managers,etc. It is under Chapter 4 (Suspension of trustees, appointment of interim managers, etc.) of the Act.

(1) The Commission may by order suspend the trustees of anassociation and appoint an interim manager or managers to manage the affairs of an association where it reasonably believes that—

(a) there is or has been any misconduct or mismanagement in the administration of the association ;

(b) it is necessary or desirable for the purpose of—

(i) protecting the property of the association,

(ii) securing a proper application for the property of the association’s onwards achieving the objects of the association, the purposes of theassociation of that property or of the property coming to the association,

(iii) public interest ; or

(c) the affairs of the association are being run fraudulently.

(2) The trustees shall be suspended by an order of Court upon the petition of the Commission or members consisting one-fifth of the association and thepetition shall present all reasonable evidence or such evidence as requested by the Court in respect of the petition.

(3) Upon the hearing of the petition and the appointment of the interim manager, the Court, with the assistance of the Commission, may make provision with respect to the functions to be performed by the interim manager or manager appointed by the order—

(a) the powers and duties of the interim manager or managers which may include the powers and duties of the trustees of the association concerned ; and

(b) any power or duty specified under paragraph (a) to be exercisable or discharged by the interim manager or managers to the exclusion of the trustees.

(4) The functions shall be performed by the interim manager or managers under the supervision of the Commission.

(5) The reference in subsection (1) to misconduct or mismanagement extends to the employment for—

(a) the remuneration or reward of persons acting in the affairs of the association, or

(b) other administrative purposes, of sums which are excessive in relation to the property which is or is likely to be applied or applicable for the purposes of the association.

(6) A court of competent jurisdiction may, upon the petition of theCommission or members of the association—

(a) order or suspend any person, officer, agent or employee of theassociation from office or employment, provided that such suspension does not exceed 12 months from the date of the order or suspension;

(b) by order appoint such number of additional trustees as it considers necessary for the proper administration of the association ;(c) by order—

(i) vest any property held by or in trust for the association in the official custodian, who shall be a person so designated by the court from time to time ;

(ii) require the persons in whom any such property is vested to transfer it to the official custodian who will be an individual as the court may,from time to time designate, or

(iii) appoint any person to transfer any such property to the official custodian ;

(d) order any person who holds any property on behalf of the association,or of any trustee for it, not to part with the property without the approval of the Court ;

(e) order any debtor of the association not to make any payment in or towards the discharge of the debtor’s liability directly to the association butto make such payment into an interest yielding account held by the Commission for the benefit of the association ;

(f ) by order restrict (regardless of anything in the trusts of the association)the transactions which may be entered into, or the nature or amount of the payments which may be made, in the administration of the association without the approval of the court ; or

(g) by order appoint an interim manager to act as receiver and manager in respect of the property and affairs of the association.

(7) Where, at any time after the Commission has made an enquiry into the affairs of the association, it is satisfied as to the matters mentioned in subsection (1), it may suspend or remove—

(a) any trustee who has been responsible for or privy to the misconduct or mismanagement or whose conduct contributed to or facilitated it ; or

(b) by order of the Court, establish a scheme for the administration of the association.

(8) The court may by order replace a trustee removed under subsection (7).

(9) A person who contravenes an order under subsection (6) (d), (e)and (f ) commits an offence and is liable on conviction to fine as the Court deems fit or imprisonment for a term of 6 months or to both.

(10) The Commission may make regulations in respect of—

(a) the functions, powers and remuneration of the interim manager and the manner in which the interim manager shall make reports to the Commission ; and

(b) making reports to the Commission, and such other things as may be necessary for the effective administration of the association during the period of its interim administration.

(11) The Commission shall only exercise its power under this section in respect of any association with the approval of the Minister.