By Bassey Udo
The Bureau of Public Enterprises (BPE) has described as unfortunate the deepening crisis over the ownership of Benin Electricity Distribution Company (BEDC).
The privatization agency said on Saturday in Abuja that it was monitoring closely events in the company following the recent intervention by the power sector regulator, the Nigerian Electricity Regulatory Commission (NERC).
A fortnight ago,NERC waded into the crisis, after confirming the tussle for the ownership and control of the company was taking its toll on electricity distribution and negatively impacting supply to consumers in the four states under the BEDC operational franchise.
In a public notice titled, ‘The Legitimate and Statutorily Recognised Board of Directors/Management of BEDC Electricity Plc,’ the Commission said electricity consumers in Edo, Ekiti, Delta and Ondo states were concerned about the continued disruption of BEDC’s service as a result of the lingering crisis.
The Commission drew attention to public notices by Lucky Ayomoto, published on August 9, 2022, in which he claimed to be acting on behalf of the former board/management of BEDC.
The controversial public notices, NERC said, described the appointment of Messrs Henry Ajagbawa, K.C Akuma, Adeola ljose, Charles Onwera and Yomi Adeyemi as new directors of BEDC as an “unlawful misrepresentation and unfortunate misadventure.”
In clarifying issues underlining the crisis, NERC acknowledged the BEDac as its distribution licensee, which by virtue of the powers vested in the Commission by the Electric Power Sector Reform Act, NERC was the primary authority vested with the powers to statutorily recognise the board/management of the company as an operator in the Nigerian Electricity Supply Industry.
“The general public may wish to note that BEDC is jointly owned by private investors, with Vigeo Power Ltd holding an equity of 60 percent, and 40 percent being held by the Bureau of Public Enterprises on behalf of the federal and state governments.
“One of the shareholders in Vigeo Power Ltd, Vigeo Holdings Ltd, subscribed to its shares vide a loan from Fidelity Bank Ltd.
“In the light of a default in servicing the said loan, the bank has exercised its rights to repossess these shares that were provided as security for acquisition of the loan.
“Upon repossession of shares of Vigeo Holdings Ltd by the bank, an application was filed by the banks and the BPE with the Commission for the approval of an interim board of directors and management for BEDC in compliance with NERC’s business continuity arrangements for licensees,” NERC explained.
Also, NERC said after the review of the situation, it approved Messrs Henry Ajagbawa, K.C Akuma, Adeola ljose, Charles Onwera and Yomi Adeyemi as interim board of directors for BEDC, with Henry Ajagbawa as Managing Director.
The Commission said the decision by the former management of BEDC to challenge the appointment of the interim Board in court after the regulatory authority and shareholders interventions were completed was unsettling the primary obligations to customers in Edo, Ekiti, Delta and Ondo states.
In its reaction, the BPE said although an Interim Board has been recognized by the regulatory authority and the Bureau has retaken operational control of the Headquarters in Benin, the crisis was still not resolved.
The Bureau said despite that the Interim Board had already taken financial control of the company, deployment of non-state actors by the former Board and Managing Director to forcefully disrupt its operations has continued to deepen the crisis.
This is unfortunate. The actions, if left unchecked, risked plunging the citizens of Delta, Edo, Ekiti and Ondo (under the BEDC franchise) into darkness,” BPE said.
It said following Vigeo Holding, having defaulted on their loan facilities, and having collateralized their controlling shares, lost ownership in BEDC.
The development, the Bureau said, was followed by a restructuring action announced on July 5, 2022 by BPE and NERC for the Kano, Kaduna, Benin and Ibadan DiSCO franchises, with Fidelity Bank stepping in to the Board and the appointment of an interim Management by BPE and NERC to stabilize the entities and avert any operational issues arising.
The next step, BPE said, was for the entities to be transitioned from the Bank’s control to more financially and technically competent private investors under a structured process being monitored by the National Council on Privitisation (NCP) (via the Bureau) and the Central Bank of Nigeria.
“While the restructuring action in Kano, Kaduna and Ibadan took place without issue, the Benin DiSCO restructuring had faced disruptions by the investors that were exited,” BPE said.
BPE said it would, alongside NERC, continue to monitor the situation at the company and work with the Federal Ministry of Power and relevant law enforcement agencies to ensure no disruptions of service in franchise are, to allow the interim Board and Management to proceed with their work unimpeded.