Tussle for Disco’s Shareholding Not Driven by Greed, Says Investor

Chineme Okafor in Abuja
The lingering tussle for the control of the shareholding structure of the Abuja Electricity Distribution Company (Disco) is not influenced by greed, but rather by the need to enthrone probity in the Disco’s affairs, one of the warring investors has said.

According to a statement sent to THISDAY, CEC Africa Investments Limited (CECA), which claimed to be a major shareholder of the Abuja Disco said its partner, Xerxes Global Investment Limited was creating a wrong impression of the disagreement between both parties.

CECA alleged in the statement, which was signed by its Managing Director, Emmanuel Katepa, that Xerxe breached a $41 million funding agreement for acquiring the power Disco in 2013.

It equally dismissed claims by the Chairman of Xerxes Limited, Mr. Shehu Malami, that the investors’ crisis was fueled by greed, adding that Malami’s reported claim that CECA ought to pay him for his goodwill which facilitated the sale of the Disco to their consortium – KANN Utility Company Limited, was incorrect.

Katepa, stated that goodwill could not have bought the Disco, adding that during the privatisation exercise, there were financial obligations the bidders were expected to meet which prompted CECA and Xerxes to agree on the financial arrangements, starting with the initial payment of $41 million to the Bureau of Public Enterprises (BPE). He said Xerxes immediately failed to pay its contribution leaving all the payments to be done by CECA.

“Till date, Xerxes has not shown any capacity to repay its part of that obligation to CECA, six years after the privatisation. Yet it wants to claim major ownership of AEDC but has failed to fulfil any financial obligation and has left the business risk on CECA,” Katepa stated.

He challenged Malami and Xerxes to disclose their financial contributions in the acquisition of the Disco, stating that: “Ambassador Shehu Malami failed to address the central issue which remains that he and his organisation are claiming shares for which they have failed to pay and show no capacity to pay.”
According to him: “In recognition of its failure to pay its share of the acquisition cost in 2013, Xerxes even pledged to CECA, as security, half of its equity share in KANN. At the time, the arrangement was expected to be cured within 120 days, during which time Xerxes was to source its contribution and pay its share. As we speak, Malami has not paid, yet (he) is denying us the right to that majority equity stake.”

He also said it was on this basis that CECA and Xerxes went to the London Arbitration Court and judgement was gotten in favour of CECA.
“This award was further recognised in the High Court of Nigeria in February 2018. Not pleased with this, Xerxes approached the Appeals Court sitting in Abuja, where the appeal is pending.

“We have the facts. We have managed power utilities in several African countries and are transforming AEDC but Xerxes is frustrating this effort, insisting on the removal of the very qualified and experienced officials who, working hand in hand with Nigerian personnel, are making the change at AEDC possible to be replaced by unknown people with no recorded experience of managing any power utility,” Katepa claimed.

He noted that CECA, “will not be driven into silence for exercising our rights in steering the affairs of AEDC to improving the power supply experience of our esteemed customers.”

Meanwhile, the Managing Director of the Abuja Disco, Mr. Ernest Mupwaya, has claimed that the Disco was the best amongst its peers operating in Nigeria’s power sector.

Mupwaya, said this when the House of Representatives Committee on Privatisation and Commercialisation paid visited him on an oversight legislative function.
He explained to the committee led by its chairman, Mr. Timilehin Adelegbe, that the Disco had invested in integrated inspection system, modernised protection system, integrated management system, as well as in high-tech tools to make its operations efficient.

Mupwaya, equally stated that the financial books of the Disco were fully audited in compliance with the Financial Reporting Council of Nigeria, while it has embarked on an accelerated programme to get everybody metered.