Alleged unpaid debts: Osibodu, Dantata lose Benin, Kano, Kaduna Discos to Fidelity Bank, Afrexim
…As FG appoints new CEOs for distressed DisCos
…Activates emergency fund for Port Harcourt DisCo
The alleged failure to pay huge debts owed Fidelity Bank Plc by investors that acquired Benin, Kano and Kaduna Electricity Distribution Companies have resulted in the commercial takeover of their boards. These affected the removal of the Chief Executive Officer of Benin Electricity Distribution Company Mrs Funke Osibodu, Chairman. Kano DisCo Alhaji Tajudeen Aminu Dantata and others.
Recently, the United Bank Plc also took over the Abuja DisCo in a similar alleged failure to pay huge loans owed the bank. The board of Ibadan DisCo was equally sacked by AMCON following the inability of the investors to service loans owed banks.
This commercial takeover of these DisCos is a confirmation of the statement made by President Muhammadu Buhari on Channels Television recently that the DisCos were acquired by those with no financial capability but as political favour.
According to the President, “The owners of DisCos bought them based on geo-political zones rather than merit. The people that own them, who are they? They are not electrical engineers, they don’t have money, it is just a political favour.”
Hence, yesterday the BPE and NERC stated announced that they were informed by Fidelity Bank Plc that the bank has activated the call on the collaterised shares of Kano, Benin and Kaduna (Fidelity and Afrexim) DisCos and that they have initiated action to take over the boards of these DisCos and exercise the rights on the shares.
The statement states that Fidelity Bank’s action is a contractual and commercial intervention and is between the Core Investors in the DisCos and the lender. According to the statement, the BPE is involved because of the 40% shareholding of Government in the DisCos. Fidelity Bank has informed us that the new Board members of the affected DISCOs will be as follows:
Kano DisCo: Hasan Tukur (Chairman), Nelson Ahaneku (Member), Engr. Rabiu Suleiman (Member)
Benin DisCo: KC Akuma (Chairman), Adeola Ijose (Member), Charles Onwera (Member)
Kaduna DisCo: Abbas Jega (Chairman), Ameenu Abubakar (Member), Marlene Ngoyi (Member)
BPE has nominated Bashir Gwandu (Kano), Yomi Adeyemi (Benin), and Umar Abdullahi (Kaduna) as independent Directors to represent Government’s 40% interest in the three DISCOs respectively, during this transition.
President Muhammadu Buhari had lamented on Channels Television that Nigerians are facing epileptic power supply because those who bought the various electricity distribution companies got them based on political factor and geopolitical consideration rather than based on merit.
The statement issued yesterday by both the Chairman, Nigerian Electricity Regulatory Commission (NERC) and the Director General Bureau of Public Enterprises (BPE) stated that both the BPE and NERC are engaging with the Central Bank of Nigeria (as the banking sector regulator) to ensure an orderly transition and to ensure that Fidelity Bank does not hold the DisCos’ shares in perpetuity.
According to the statement, it is envisaged that the majority interest in the entities would be sold to capable private sector investors willing and able to re-capitalise and manage the entities efficiently.
“We have also received assurances that Fidelity Bank will participate fully in all the ongoing market initiatives aimed at improving the sector (e.g. National Mass Metering Program),” it stated.
The statement added that in the interim, NERC and BPE met on an Emergency Basis and activated the Business Continuity Process and have appointed interim Managing Directors in the affected DisCos. These include Kano DisCo – Ahmad Dangana; Benin DisCo – Henry Ajagbawa and Kaduna DisCo – Yusuf Usman Yahaya
Also, with the takeover of Ibadan DisCo by AMCON, the BPE stated that it has obtained approval from NERC to appoint Kingsley Achife as the interim Managing Director.
In a temporary capacity, the BPE stated that the leadership of AMCON will be a placeholder Board for the Ibadan franchise (Ahmed Kuru – Chair, Eberechukwu Uneze – Member, Aminu Ismail – Member). Oluwaseyi Akinwale will represent the interest of Government on the Board alongside the DG of BPE.
The BPE also announced the ongoing re-structuring of the Management and Board of Port Harcourt DisCo to forestall the imminent insolvency of the entity. As a condition for support to the entity to meet its market obligations, the BPE said that Iboroma Akpana will take over as the Chairman of the Board. Emmanuel Okotete, Eyo Ekpo, Ismaila Shuaibu and the DG of BPE will form the interim Board.
It equally announced that Mr. Benson Uwheru will take over as the Managing Director of PHEDC as part of the changes.
“Government will support the activation of Emergency funds through the Nigerian Electricity Market Stabilisation Facility to support the entity while it goes through restructuring and repositioning to serve the citizens of the franchise area better.
The BPE announced collaboration with the NERC and the Honourable Minister of Power to ensure no service disruptions during these transitions.
“We remain committed to supporting the Nigerian Electricity Supply Industry to serve Nigerians better,” the DG assured.
