The Federal Government has transferred its 40 percent shareholding in eleven (11) Distribution Companies (DisCos) from the Bureau of Public Enterprises (BPE) to the Ministry of Finance Incorporated (MOFI).
Minister of Finance and Coordinating Minister of the Economy, Wale Edun announced the development in a letter dated January 10, 2024, signed and sent to the Board of Directors of the Ministry of Finance Incorporated.
The letter was sent barely four days after the removal of the Director-General and Chief Executive Officer of BPE, Alex Okoh by President Bola Tinubu.
Recall that the 11 DisCos were privatised after the successful unbundling of the Power Holding Company of Nigeria (PHCN) in November 2013.
The DisCos are Benin Electricity Distribution Plc, Eko Electricity Distribution Plc, Enugu Electricity Distribution Plc, Ibadan Electricity Distribution Plc, Ikeja Electricity Distribution Plc, Jos Electricity Distribution Plc, Kaduna Electricity Distribution Plc, Kano Electricity Distribution Plc, Port Harcourt Electricity Distribution Plc, and Yola Electricity Distribution Plc.
In the letter, the Minister directed the Board of Directors of MOFI to “with immediate effect: resile from, revoke and terminate any and all instruments, agreements, documents howsoever described, including without limitation to the power of attorney executed sometime in 2012 whereby MOFI granted and donated Powers to the BPE in connection with the shareholding of the Federal Government of Nigeria in the successor companies to the Power Holding Company of Nigeria;
“assume ownership, control, and management of all equity holding of the Federal Government of Nigeria in the said successor companies of the Power Holding Company of Nigeria;
“assume ownership, control, and management of all equity holding of the Federal Government of Nigeria as contemplated and provided for by law and/or any contract; and issue all appropriate notices, instruments, documents which are required to give effect to this directive”.
Prior to this directive, BPE was the holder of record of the equity interests of the Federal Government of Nigeria in this company as mandated in Section 9 of the now-repealed Electric Power Sector Reform Act, 2005.
In this regard, since the privatisation of this Company was completed on 1st November 2013, BPE has nominated various persons to be directors in this company and managed the implementation of the various rights and obligations of the FGN in the company.
Also under a Power of Attorney granted by the Minister of Finance in 2012, BPE was appointed the lawful attorney of the Ministry of Finance Incorporated to implement the decision of the National Council on Privatisation (NCP) to privatise this Company via a sale of shares. The responsibility thereby conferred by the Minister of Finance was subsequently completed with the successful privatisation of this Company on November 2013.
However, justifying the action, the Minister said, it is the position of the government that, as contemplated and provided for in the establishment Act of the Ministry of Finance Incorporated, the Ministry of Finance Incorporated should assume the ownership, management, and control of the interests of the Federal Government in entities where the Federal Government has equity holding, howsoever held.
In a related development, following the Minister’s directive, the Chief Executive Officer (CEO) of MOFI, Dr. Armstrong Takang had written to the Chairman of the Board of Directors of all the successor companies to inform them of the formal termination of the Power of Attorney and directed the restoration of the FGN’s equity interests in all electricity successor companies to be held and treated by MOFI.
Dr. Takang said, “we give notice of the following and expect that consequential actions will be taken by the Company forthwith:
“The BPE nominee director on the board of directors of this Company is withdrawn with immediate effect;
“Share certificates of the Company issued in the name of the BPE are to be immediately withdrawn and cancelled;
“A new share certificate for all outstanding shares of the FGN in the Company is to be issued in the name of “MINISTRY OF FINANCE INCORPORATED”.
“All minutes of Board meetings, current management operational reports, extant strategic business and operating plans, management accounts, and audited financial statements going back to the 2021, 2022, and 2023 financial years should be immediately delivered to MOFI at the address shown here.
“We expect that you will immediately take on board and implement these decisions”, he ordered.
Meanwhile, BPE, in December 2023 disclosed its plan to sell the remaining 40 percent shares of the government in electricity distribution companies on the capital market this year (2024).
It said, the original intention for the partial privatisation of the Discos was to be able to list the 40 percent still being held by the government in the stock market to demonstrate the ownership of the entities.
