Real Reasons Nigerian Government Suspended AEDC Management

President, Federal Republic of Nigeria, Muhammadu Buhari.

The Federal Government earlier today announced the suspension of the Management of Abuja Electricity Distribution Company (AEDC) until further notice.

President Muhammadu Buhari was quoted to have approved the suspension of the management of AEDC, and a new interim governing board appointed to oversee the day to day operations of the electricity distribution company.

TheFact Nigeria had reported that the suspension was attributed to the recent industrial action embarked upon by the AEDC staff over non-payment of arrears of pensions, allowances, salaries and promotion; describing it as non- performance, incompetence and National embarrassment.

Meanwhile, the documents obtained from AEDC on the staff welfare crisis, 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 United Bank for Africa (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.

Industry and Company Sources said, operations and management of AEDC were not affected, 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 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 Stabilization 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 concern of imminent grounding of activities at AEDC due to the continuous hold on the Nigerian Electricity market Stabilization 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 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 to guarantee smooth operations as NUEE was threatening strike already.

On 3rd December (last week), the Managing Director of AEDC, Ernest Mupwaya wrote to CBN governor seeking 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 disburse the fund but the meeting was not held at the instance of CBN.

However, the meeting was said not to have held before the industrial action by NUEE occurred on Monday.

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 was more than the amount the company claimed to have generated in eight months.

The source was however, silent on why the apex bank refused to pay staff salaries and other entitlements since taken over the operations of the company for over six months.

Nevertheless, the sack of the management team conveyed by the Presidency to the Federal Ministry of Power takes immediate effect.

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