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CHAPTER ONE

INTRODUCTION

1.1  BACKGROUND TO THE STUDY

Directorial improprieties in public corporation is expressed most frequently in terms of misrepresentations in financial statement of such corporations. Manipulations in the stock exchange, commercial bribery of public officials directly or indirectly, in order to secure favourable contracts. Embezzlement and misapplication of funds etc. these varied types of directorial criminality consist principally of violation of delegated or implied trust which can be reduced into two categories: misrepresentation of asset values the financial loss from directorial criminality high as it is, does not, match the damage to social relations, resulting from mis government to social relations Directorial Criminality and mismanagement, thus violate trust and creates distrust. Directorial improprieties, through has civil implications is crime in real sense since it is a violation of criminal law.

And again because corporate law is widely believed to be titled against shareholders of corporations and because. It is no more anomalous that shareholders do not manage or control them corporations and because directorial improprieties leads to bankruptcy criminal law has responded by providing appropriate machinery for control of the income of the public corporations. However, rising corruption, management inefficiencies over staffing (without due regard to their economic viability, many governments treated PES as easy conduits for job creation and a convenient vehicle for patronage distribution), Inflation and rising serious “government failures” and the limits of PES as major players in economic development. In addition to management deficits many PES also suffered from technological short comings.

Imported through either foreign aid or soft loans from abroad, many of the PES were either equipped with low or second grade machineries contributing to low capital/output ratio, were established without due regard to their economic and financial sustainability. Historically, the federal government has been involved in few commercial enterprises. There were some early instances of the federal government participating in otherwise private corporate enterprises on a shared ownership basis. Heaving after the federal government has tended to avoid sharing ownership with private entities. The first time the federal government acquired a corporation out right occurred in 1903.

Since then a number of corporate bodies have been established as part of the federal government with growth in that number tending to come in spurts and generally in response to emergencies. The first large-scale use of the corporate option accompanied the mobilization for World War 1. Later, the Depression of the 1930s fostered numerous corporations (e.g The Reconstruction Finance Corporation, and the Tennessee Valley Authority) finally, World War 2 prompted the establishment of additional federal corporations. After the passing of each of these emergencies, many of the corporation that dealt with them were abolished or absorbed into the permanent executive branch agencies.

In 1945, partly in response to the proliferation of corporate bodies created for the war effort. Congress passed the Government corporation control (GCCA, 59stat. 841.) The act standardized budget, auditing, debt management and depository practices for corporations. Not with standing unusual provisions that may be present in their enabling statute, government corporations remain ordinary agencies and hence subject to all laws governing agencies, except where exempted from coverage by provisions of g7eneral management laws.

The GCCA is not a general incorporation act such as is in effect in the states. The charter for each federal government corporation is the separate enabling legislation passed by congress. The GCCA also does not offer a general definition of what constitutes a government corporation. It simply enumerates the organizations covered by the act. In addition to the enumeration of corporation in the GCCA, there have been several other listing of corporations available, each different and based upon the definition employed by the compiler. The corporations cover the spectrum from such large, well known corporations as Nigeria postal services well known corporations as Nigeria postal services and the Federal Deposit Insurance Corporation to such small, low visibility corporate bodies as the Federal Financing Bank and  Federal prison industries (UNICOR).

1.2   STATEMENT OF THE PROBLEM

The problem facing government parastatals are of difference factors. The major of which is then lack of adequate financing. Due to inadequate fund, government parastatal tends to operate at a low capacity or inefficiency thus making service being rendered to the general public poor. Transport company of Anambra state for instance has been having problem of financing: is it because government does the poor financing effect ,their earring for transportation and other sources of revenue is it because of poor state of economy that government earning from both domestic and foreign sources were affected, and government subvention to corporation were fell drastically?

1.3   OBJECTIVE OF THE STUDY

The purpose of this study is to know the financing problem of government corporation, which actually have hindered their efficiency and profitability and way it can be solved.

i. To determine if commercial bank finance the activities of transport company of Anambra state.

ii. To determine if high interest rate charged by commercial bank affect the loan seeking habit of transport company of Anambra state.

iii. To find out if the adequate financing of transport company of Anambra state have any effect on the level of its services rendered to customers.

iv. To find out if government corporation experience any financial problem.

1.4   RESEARCH HYPOTHESIS

H0:  Commercial bank do not finance the activities of transport company of Anambra state.

H1:  Commercial banks the activities of transport company        of Anambra state.

H0:  The higher interest rate charged by commercial banks        do not affect transport company of Anambra state in       obtaining loans.

H1:  The higher interest rate charged by commercial banks       affect transport company of Anambra state in obtaining       loans.

1.5   RESEARCH QUESTIONS

From the fore going. This study will provide the answers to the following question

i. Does commercial bank finance the activities of transport company of Anambra state.

ii. Does the high, interest charged by commercial bank affect the loan seeking habit of transport company of Anambra state.

iii. Does adequate financing of (TRACAS) have any effect on the level of its services rendered to customers.

iv. Does government co-operation experience any financial problems.

1.6   SIGNIFICANCE OF THE STUDY

The significance of this research study tends to enrich the researcher with unraveling the funding problems of the corporation (TRACAS) in particular and other corporations in general. It is significant to study the aspect of commercial funding of TRACAS since lack of finding will militate against the operations of the corporation and hence the general public who are the beneficiaries of TRACAS will be left unsatisfied.

It is also of significant to study this aspect of research because lack of funding will ground operations in transport company of a Anambra state. This will make members of the staff vedundant. TRACAS  as we all know play an important function in providing means of transportation for the corporation, to go out of operation due to lack of adequate funding will be a big below to the state government.

1.7   SCOPE OF THE STUDY

The study covers the various sources of financing TRACAS AND OTHER PUBLIC CORPORATION IN Anambra state like Anambra Broad Casting Service. The study will examine the corporation invested turnover, profitability and viability. It will determine if the funding of these corporations has been adequate or not suggestion is to be made on means of improving on the corporation financing.

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