Court Halts BEDC TakeoverAlex Enumah in Abuja

In an action commenced by Vigeo Power Limited, the majority shareholder of Benin Electricity Distribution Company Plc (BEDC), the Federal High Court, Abuja on last Friday issued an order restraining Fidelity Bank Plc and others from taking over the power distribution company, pending the hearing and determination of the motion on notice dated July 8, 2022.
While other defendants in the suit are the Nigerian Electricity Regulatory Commission (NERC), Corporate Affairs Commission (CAC), Henry Ajagbawa, Charles Onwera, Yomi Adeyemi, K.C. Akuma, Yomi Adeyemi, those affected by the order include the Bureau of Public Enterprises (BPE) and the Nigeria Police Force (NPF).
The plaintiff, Vigeo Power Limited who are the majority shareholder in the BEDC, in the suit No. FHC/ABJ/CS/1113/2022, is praying the court for an order of interim injunction restraining Fidelity Bank Plc, whether directly or indirectly, through its directors, managers, officers, employees, servants, consultants, attorneys, agents, representatives, privies, however so-called, persons acting under its instructions and control, including the entities set out in this application from altering or further altering the board composition of BEDC or working in concert with any person or party to alter the board composition of BEDC.
Besides, BEDC also prayed for an order of interim injunction restraining NERC and CAC, from registering or recognizing Henry Ajagbawa, Charles Onwera, Yomi Adeyemi, K.C. Akuma, Yomi Adeyemi as directors of BEDC pending the hearing and determination of the motion on notice dated July 8, 2022.
The plaintiff further asked for another order of interim injunction restraining Henry Ajagbawa, Charles Onwera, Yomi Adeyemi, K.C. Akuma, Yomi Adeyemi, from parading themselves or holding themselves out as directors of BEDC pending the hearing and determination of the motion on notice dated July 8, 2022.
Besides this, the applicant also asked the court for an order of interim injunction restraining Henry Ajagbawa, Charles Onwera, Yomi Adeyemi, K.C. Akuma, Yomi Adeyemi, from taking over the management and control of the affairs, assets and undertakings of BEDC pending the hearing and determination of the motion on notice dated July 8, 2022.
The application was sequel to the purported activation of the call on the collateralised shares of Kano Electricity Distribution Company (KEDC) Kaduna Electricity Distribution Company and BEDC Electricity Plc (the DisCos) recently in a bid to take over the respective Boards of the DisCos over the inability to repay the loans obtained to acquire majority stakes in the DisCos in furtherance of the 2013 privatisation exercise.

The referenced report also alleged that certain parties have been appointed as Board Members, Independent Directors and Managing Director of BEDC Electricity Plc.  

The applicant stated that the said appointments have been communicated by the Bureau of Public Enterprises (BPE) and the Nigerian Electricity Regulatory Commission.

The management of the BEDC issued a press statement recently in which it stated, “that there is no contractual, statutory or regulatory basis for such,” remarking that, “For the avoidance of doubt, the shares of BEDC have not been given as security to Fidelity Bank or to any other party.”

According to the statement, “As we understand it, Vigeo Holdings Limited (VHL – a non-shareholder of BEDC) obtained credit facilities from Stanbic IBTC Bank Limited, Fidelity Bank Plc, and Keystone Bank Plc (the VHL Lenders).

It noted further that the said credit facilities (and any enforcement action in relation thereto) have in the meantime become subject of litigation in a Court action instituted by VHL and other plaintiffs (the VHL Action) with Suit No: FHC/L/CS/239/22 – Vigeo Holdings Limited and 4 Ors v. Stanbic IBTC Bank Limited, and therefore, subjudiced.”

The management of BEDC had stated, “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.”

It therefore 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, “remain focused on its mission to ensure delivery of quality and reliable electricity to the good people of Edo, Delta, Ondo and Ekiti.