By Ahamefula Ogbu
 

The Bureau of Public Enterprises has appealed to the Nigerian Electricity Regulatory Commission (NERC) not to go ahead with an order cancelling and revoking Ibadan Electricity Distribution Company (IBEDC), as doing so would trigger off certain provisions in the performance agreement with grave consequences to the federal government.

Instead, the Bureau suggested that it be given two weeks to resolve the matter amicably and urged NERC to reconsider its stand and order so as to accommodate their concerns.

In a letter dated June 20, 2018 with reference number BPE/LSCS/NERC/2018/26 addressed to the Chairman of NERC, the Bureau acknowledged receipt of the order but pleaded for time to peacefully resolve the issues.

The letter titled, “Re: Order No: NERC/181/2018: In the Matter of an Application  of the Enforcement Regulation for the Nigerian Electricity Supply Industry Pursuant to the Electric Power Sector Reform Act”, and signed by Director General of the Bureau, Alex. O Okoh, the Bureau said it was well seized of the matter leading to the order on IBEDC, which was the findings  of NERC on the Open book review of the financial records of the  distribution company that culminated in the Notice of Intention  to Commence Enforcement (NICE) issued by NERC expecting responses to the allegations.

“However as a sister agency of government, the Bureau is particularly concerned  about certain provisions  in the said order, which directly impacts  on the activities of the Bureau; first as the statutory holder  of federal government equity investment  in the IBEDC which is 40 per cent and second also the shareholders agreement  entered into by and between BPE, MOFI, Integrated Energy Distribution and Marketing  Limited  and IBEDC, in particular we refer to the following  provisions in the said order.

“Order 1 – the suspension of all executive and non-executive directors from the IBEDC board;

Order 3 – An order directing the board to call an extraordinary general meeting with 21 days to give effect to the order;

Order 4 –  The shareholders  of the company shall do the following the extraordinary general meeting  -{a} Appoint a new board comprising of executive, non-executive and independent directors; and

Order 10 – The commission shall commence the process of cancelling IBEDC‘s distribution license in accordance with section 74 of the ESPRA where the company fails to comply with any of its orders stated above,” the letter recalled.

Okoh in the letter said the Bureau was particularly worried about the cumulative effect of the orders  on the entire transaction, especially the shareholders agreement, share sales agreement and performance agreement.

“We wish to bring to the notice of the Commission that the BPE had on behalf of the FGN entered into certain covenants with the investors; and as such, the threatened cancellation or sudden revocation of the distribution license might trigger off certain provisions in the performance agreement which will be of grave consequences to the FGN.

“We request that the Commission gives the Bureau two weeks to resolve the matter amicably.

“Accordingly, we urge the Chairman to reconsider the Commission’s order as to accommodate the Bureau’s concerns”, he concluded.

There had been orders for the alleged dissolution of the board of the said distribution company and eventual revocation of the distribution license over concerns related to the financial books of the distribution company.