Following the activation of Discos collateralised shares by Fidelity Bank, the management of Benin Electricity Distribution Company Plc said on Wednesday that there is no legal basis for the takeover of the company.
Also, the receiver/manager’s nominee of Integrated Energy Distribution and Marketing Company on Wednesday said it was the legal and beneficial owner of 60 per cent (controlling and managing) shareholding interests in the Ibadan Electricity Distribution Company.
The two firms revealed this in reaction to the announcement of the Federal Government regarding Fidelity Bank Plc's takeover of Kano, Benin, and Kaduna electricity distribution companies Plc after the bank initiated action to take over the boards of the three Discos.
The government had announced that with the takeover of Ibadan Disco by the Asset Management Corporation of Nigeria, the BPE had obtained approval from the Nigerian Electricity Regulatory Commission to appoint an interim managing director for the distressed power firm through its Bureau of Public Enterprises
The notice which was signed by the Director-General, BPE, Alex Okoh; and Executive Chairman, NERC, Sanusi Garba, stated that Government was restructuring the management and board of Port Harcourt Disco to forestall the imminent insolvency of the utility.
It 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 made the claims in a statement through its counsel, Kunle Ogunba, SAN.
However, the receiver/manager’s nominee said in the statement signed by Ogunba that IBEDC was unlawfully included in the announcement, adding that the government’s publication was “ill-conceived”.
The statement read in part, “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 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’.
The management of Benin Electricity Distribution Company Plc also kicking against the announcement of the government said in a statement that there was a basis for the takeover of BEDC, as it assured customers and stakeholders of continuing operations.
The firm also insisted that there is no legal basis for the takeover of the company following the purported activation of the call on its collateralised shares by Fidelity Bank.
The management of the firm, however, added, “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 BEDC Plc 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 has urged its customers, investors, and business partners to disregard the trending reports while assuring them of continuing smooth operation
Abubakar Aliyu, the minister of power said on Wednesday that the NERC had briefed him and BPE on the recent events relating to corporate governance in Kano, Benin, Kaduna, Ibadan, and Port Harcourt electricity distribution companies necessitating a change in the respective board of directors and management.
“The changes announced 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,” the minister stated in a statement issued in Abuja by his media aide, Isa Sanusi.
He added, “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 per cent 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.
“It is therefore expected that clear timelines for the exit of the banks would be prescribed by the regulators as and when appropriate.
“We wish to reassure electricity consumers that the recent changes in the governance of the Discos would not adversely impact the ongoing reform initiatives including the National Mass Metering Program.
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