BPE insists on new boards for five indebted DisCos
…BEDC says action is a show of force
The Bureau of Public Enterprises (BPE) has insisted on new Boards for Benin Electricity Distribution Company (BEDC), and four others, recently affected by last week’s decision to set up new boards.
The other Discos whose boards were equally reconstituted were those of Kano, Kaduna, Ibadan and Port Harcourt. BEDC had on July 8, 2022, obtained an interim order from the Federal High Court in an attempt to halt the board’s reconstitution process.
The Director-General of BPE, Alex Okoh, explained in a statement, yesterday, that the order was obtained after the new boards had been reconstituted on July 5, 2022.
He said, “Following this unfortunate development, it has become imperative for Council (National Council on Privatisation) to educate both the staff of BEDC and the public; particularly those within the BEDC franchise area comprising Edo, Delta, Ondo and Ekiti states of the steps taken by the Federal Government regarding the Board composition of the various Electricity Distribution Companies across the country which were concluded on July 2022.
“Therefore, the National Council on Privatisation wishes to state that the Board composition of both BEDC and the other four DisCos was concluded on July 5, 2022, three days before the purported court order.
“Fidelity Bank informed Council, vide its Secretariat, the Bureau of Public Enterprises, that they have activated the call on the collateralised shares of Vigeo Power Limited in BEDC.
“Fidelity Bank’s action is a contractual and commercial intervention between the Core Investor (Vigeo Power Limited) and the lender. BPE is involved because of the 40% shareholding of the Government in the BEDC.
“Federal Government, in order to safeguard the industry and also support the Market Stabilization through restructuring and repositioning to serve the citizens of the franchise area better, decided to appoint a new Board for BEDC.”
The DG said that the federal government would work to ensure that there were no service disruptions during the transition period.
Responding to the development, Vigeo Power Limited, the majority shareholders of Benin DisCo, has countered this claim, saying it is illegal.
Kunle Adegoke (SAN), the lawyer to Vigeo Power Ltd, said BPE laboured unsuccessfully to justify its attempts at illegally taking over the BEDC despite the orders of an injunction issued by the Federal High Court, Abuja July 8, 2022, in Suit No. FHC/ABJ/CS/1113/2022 between Vigeo Power Limited vs. Fidelity Bank Plc and seven others.
“It is on record that the total shareholding of the Bureau of Public Enterprises and the Ministry of Finance in BEDC is just 40 percent making the two of them minority shareholders which pale into insignificance in the face of the 60 percent shareholding held by Vigeo Power Limited, our client,” the lawyers explained.
The law firm said it is only a show of force of state power to take over BEDC.
“It is sad that in a worst form of brigandage unknown to Companies and Allied Matters Act (CAMA) and the Shareholders’ Agreement dated August 21, 2013, which is subsisting among the parties, the BPE, using Fidelity Bank Plc as a front, has decided to take over a company that is not indebted to either BPE or Fidelity Bank using the naked force of state power,” Adegoke said.
“Contrary to the impression sought to be created by BPE in the publication referred to above, Vigeo Power Limited’s 60 percent shareholding in BEDC was never collateralised in any loan transaction with Fidelity Bank Plc or any other financial institution.”