BY CHUKS OLUIGBO
The Federal Government-sanctioned takeover of five electricity distribution companies (DisCos) in Nigeria is not sitting well with some of the DisCos and they have vowed to battle it out with the government.
The takeover of Kaduna, Benin and Kano DisCos by Fidelity Bank and the appointment of new boards for the companies was announced by the Nigerian Electricity Regulatory Commission (NERC) and the Bureau of Public Enterprises (BPE) in a statement on Tuesday night.
The statement, signed by Sanusi Garba, executive chairman of NERC, and Alex Okoh, director-general of BPE, also announced the takeover of Ibadan Disco by the Asset Management Corporation of Nigeria (AMCON), as well as the restructuring of the management and board of Port Harcourt DisCo.
But in a reaction on Wednesday, the receiver/manager’s nominee of Integrated Energy Distribution and Marketing Company, the parent company of Ibadan Electricity Distribution Company, said it was the legal and beneficial owner of 60 percent (controlling and managing) shareholding interests in Ibadan DisCo.
Similarly, the management of Benin Electricity Distribution Company Plc said there was no legal basis for the takeover of the company by Fidelity Bank.
Integrated Energy Distribution and Marketing Company, through its receiver/manager’s nominee, urged the public to ignore NERC and BPE on the reported takeover of control and management of Ibadan DisCo.
Making claims in a statement through its counsel, Kunle Ogunba, a Senior Advocate of Nigeria, receiver/manager’s nominee said the purported takeover was announced “in spite of a subsisting order of a court in Suit No. FHC/L/AMC/92/2021, granted on September 8, 2021 and varied on December 3, 2021”.
It said Ibadan DisCo was unlawfully included in the announcement, adding that the government’s publication was “ill-conceived”.
“The appointment of a receiver/manager; Assets Management Corporation of Nigeria and its Nominee; ‘Kunle Ogunba, SAN have been duly registered at the archives of the Corporate Affairs Commission, Abuja,” the statement said.
“The esteemed members of the public are hereby enjoined to ignore the publication as the BPE and NERC both in their individual and collective capacities have no power(s) under any subsisting enactment to take the steps ‘they’ have taken as indeed there is no legislation tagged ‘business continuity framework’ anywhere codified in the Nigerian laws,” it said.
In a similar vein, the management of Benin Electricity Distribution Company Plc said in a statement on Wednesday that there was no legal basis for the takeover of the company following the purported activation of the call on its collateralised shares by Fidelity Bank.
“There is no contractual, statutory or regulatory basis for such. For the avoidance of doubt, the shares of BEDC have not been given as security to Fidelity Bank or to any other party,” the management of the firm said.
It warned that “any attempt by Fidelity Bank and/or BPE to intervene in BEDC in the manner being reported will be illegal, unlawful and will be resisted”.
Consequently, the company urged its customers, investors and partners in the electricity business to ignore the trending reports while assuring them of continuing smooth operation and that it remained focused on its mission to ensure the delivery of quality and reliable electricity to the people of Edo, Delta, Ondo and Ekiti states.
But Abubakar Aliyu, Nigeria’s minister of power, on Wednesday said the changes announced by NERC and BPE were as a result of the receivership of the core investors in Kano, Benin, Kaduna and Ibadan DisCos, whereas the actions in Port Harcourt are sought to provide much-needed liquidity and prevent the insolvency and risk of collapse of the utility.
Aliyu, in a statement issued in Abuja by his media aide, Isa Sanusi, said, “In implementing the changes, the ministry shall ensure that the changes in corporate governance do not impact on the service and stability of the DisCos.
“We wish to reaffirm that while the government continue to hold a 40 percent equity stake in all the DisCos, the utilities are still private sector-led ‘going concerns’ falling under the provisions of the Companies and Allied Matters Act and subject to regulation by NERC.”
Aliyu said the power ministry had received a confirmation from the BPE and the Central Bank of Nigeria that in exercising the rights of lenders to the core investors, the financial institutions did not retain the ownership of the shares and management of the DisCos in perpetuity.
“It is therefore expected that clear timelines for the exit of the banks would be prescribed by the regulators as and when appropriate,” Aliyu said.
“We wish to reassure electricity consumers that the recent changes in the governance of the DisCos would not adversely impact on the ongoing reform initiatives including the National Mass Metering Programme,” he said.