Suspension of AEDC mgt raises dust as CBN withholds funds | Dailytrust

Suspension of AEDC mgt raises dust as CBN withholds funds

The Minister of State for Power, Goddy Jedy-Agba, on Tuesday, announced the suspension of the management of the Abuja Electricity Distribution Company (AEDC) while...

MD of AEDC, Ernest Mupwaya and Minister of State, Power, Goddy Jedy-Agba
MD of AEDC, Ernest Mupwaya and Minister of State, Power, Goddy Jedy-Agba

The Minister of State for Power, Goddy Jedy-Agba, on Tuesday, announced the suspension of the management of the Abuja Electricity Distribution Company (AEDC) while constituting an interim governing council.

This is raising more issues in the DisCo’s investors crisis as the Central Bank of Nigeria (CBN) is holding onto funds meant to clear the staff welfare issues, which had caused a strike on Monday.

Several letters from the AEDC management and Bureau of Public Enterprises (BPE) requesting for the payments from CBN were ignored at the peril of the DisCos, documents have shown.

According to a statement from Jedy-Agba’s spokesman, Ofem Uket, the decision backed by President Muhammadu Buhari, followed an industrial action embarked on by AEDC staff on Monday over non-payment of arrears of pensions, allowances, salaries and promotion.    

“The presidential directive as conveyed has also directed the Bureau of Public Enterprises to set up a new management team of the AEDC.”

AEDC was acquired by KANN Utility Company Limited, jointly owned by Xerxes Global Investments Limited, a local firm; and CEC Africa Limited (CECA), a pan African utility firm in 2013 during the power sector privatisation.

Daily Trust learnt that the suspension decision is generating more issues as to why the workers’ allowances are withheld in the first place when CBN has been an operator of the DisCos accounts since June 2021.

The industrial action had grounded power supply in Abuja and across Kogi, Niger and Nasarawa States, which are the franchise areas of the DisCo before it was called off on Monday evening.

The Minister of Power, Abubakar D. Aliyu and the Minister of State Power, Goddy Jedy-Agba had earlier intervened through dialogue with the ministry of labour, BPE, and the Nigerian Union of Electricity Employees (NUEE) before the strike was called off.

According to a communique of the meeting, “Government intervened with the firm arrangement to ensure the payment of the outstanding entitlements of AEDC staff within 21 days, said the communique signed by government officials including BPE, Nigerian Electricity Regulatory Commission (NERC) and Jedy-Agba as well as the union represented by the General Secretary of NUEE, Joe Ajaero and the Chair, NUEE FCT Council, Godfrey Aba, who led the protest.

Daily Trust, however, obtained documents from AEDC on the staff welfare crisis, which showed that the Central Bank of Nigeria (CBN) had insisted on managing the DisCo’s fund and withholding intervention funds to AEDC after a petition from UBA appointed liquidator challenging the right of CEC Africa, a core investor of AEDC to change the board composition of AEDC last year.

The shareholders’ investment crisis has been ongoing for years, which affected KANN, the parent company of AEDC.

However, sources said the operations and management of AEDC were not affected but yet CBN withheld the intervention fund due to AEDC meant to clear the staff welfare payments.

“We note that there is currently no shareholder dispute as alleged,” said the AEDC investors in a document.

A letter of BPE written to CBN on 16th June 2021, indicated that CBN and BPE had taken over the accounts of AEDC following the investors’ crisis and have been determining the operations of the company.

The letter signed by DG of BPE, Alex Okoh, named two BPE officials as signatories to the AEDC account while CBN appointed four of its officials who edged out four AEDC management officials who are Chief Financial Officer (Ije Ikoku), GM, Treasury Operations, GM, Financial Operations and GM Audit.  

However, in spite of CBN being in control of financial operations of AEDC, payments for staff welfare, which is part of the Nigerian Electricity Market Stabilisation Fund (NEMSF) 2, a double-digit CBN loan for the DisCos, was still not released.

The first tranche of N213 billion of NEMSF was disbursed in 2014 while the second tranche began last year.

In a letter to CBN on 20th October 2021, BPE raised the concern of imminent grounding of activities at AEDC due to the continuous hold on the Nigerian Electricity Market Stabilisation Fund (NEMSF) 2, a double-digit CBN loan for the DisCos.

“The Bureau, therefore, request that the CBN direct NESI SSL (a disbursing vehicle) to commence the partial release of the CBN NEMSF intervention facility to AEDC pending the resolution of all issues surrounding the ownership of the DisCo given that the non-release may incapacitate its operations hence causing untold hardship on its customers and staff,” said the letter signed by the Director-General, Alex Okoh.

With no response from the CBN on the previous letter, BPE then wrote another letter dated 23rd November 2021 to CBN Governor, Godwin Emefiele, requesting specifically, that CBN pays all the computed allowances of the AEDC staff from the NEMSF 2 to guarantee smooth operations as NUEE was threatening strike already.

On 3rd December (last week), the Managing Director of AEDC. Ernest Mupwaya wrote to the CBN governor seeking the urgent release of the fund to pay salaries and other routine expenses, but it was learnt that was ignored by CBN.

“Since the inception of the escrow in November 2020, very limited funds have been released to AEDC,” the letter said.

It also said the investors had proposed a meeting for resolution of all issues to enable CBN to disburse the fund but the meeting was not held at the instance of CBN. However, the meeting was said not to have been held before the industrial action by NUEE occurred on Monday.

For interim management, it was learnt that NERC was processing the list and would release it as soon as possible.

Meanwhile, an insider source at CBN dismissed the AEDC’s position, disclosing that the company’s account was withheld on the basis of fraudulent activities. 

The source claimed that the revenue generated by CBN in a month what more than the amount the company claimed to have generated in eight months.

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