NERC sacks all directors in Kaduna Electric
The Nigerian Electricity Regulatory Commission (NERC) has announced the removal of all the directors in Kaduna Electricity Distribution Plc (KAEDC) over its inability to pay the debt owed to the Nigerian Bulk Electricity Trading Plc (NBET).
This was contained in a document dated 1 January, signed by the NERC Chairman, Sanusi Garba, and Vice Chairman, Musiliu Oseni.
The commission said the order takes effect from 1 January and remains in force until amended or revoked by subsequent orders issued by the commission.
“All directors of KAEDC are hereby removed from office and the board of directors stands dissolved in the exercise of powers vested in the commission by section 75 of the Electricity Act (EA).
“Dr Umar Abubakar Hashidu is hereby appointed as the administrator of KAEDC further to section 75 of the EA,” the commission said.
The commission explained that the administrator shall be the de facto chief executive officer of KAEDC and shall be responsible for the management of the day-to-day affairs of the company pending the finalisation of the sale of the undertaking to a new core investor.
It said the administrator shall work with a team of special directors that shall constitute non-executive directors of the board for governance purposes.
“The following are hereby appointed as special directors for KAEDC: Alex A. Okoh – Chairman, Kabir Adamu, Sharfuddeen Zubair Mahmoud, John Ayodele and Rahila Thomas,” NERC said.
NERC said the executive management team that will work with the administrator will be constituted by the commission and announced in due course.
“The commission shall administer the sale of the undertaking in accordance with the provisions of the EA on the basis of the highest and best price offered for the undertaking,” it said.
Background
The commission noted that KAEDC has consistently failed to meet its obligations to the market in contravention of the electricity act and the terms and conditions of its electricity distribution license issued by the commission.
It added that the management, board and shareholders of KAEDC have been granted ample opportunities to address the utility’s failing performance at meetings with the commission; and they have been unable to cure the utility’s failure.
It explained that KAEDC was issued the statutory 60-day notice to show cause on 15 May 2023 and the management, board and shareholders were unable to show cause in writing within the specified timeframe as to why the utility’s distribution license should not be cancelled.
It further explained that the commission granted a 30-day extension, with effect from 20 July 2023 to the management, board and shareholders of KAEDC to provide justifiable cause in writing and they have been unable to do so.
It added that the extent of non-performance was further reiterated by a letter dated 31 July 2023 from KAEDC’s Chief Finance Officer, where he confirmed unequivocally that the utility was not in a position to comply with the basic market requirement of providing a bank guarantee in favour of NBET in compliance with the market rules and subsisting orders.
It said the commission met with Afrexim’s leadership following the expiration of the final 30-day extension and they confirmed that their transaction advisor would need four to six months to finalise the divestment process and that they could not provide the bank guarantees required to secure KAEDC’s market obligation.
“As at 1 October 2023, KAEDC owes NBET and Market Operator (MO) over NGN 110 billion and stands at risk of direct receivership if the utility’s continued participation in the electricity market as presently constituted at the management, board and shareholder level is allowed to continue without urgent regulatory intervention.
Yusuf Yahaya, the managing director and the chief executive officer of Kaduna Electric, had recently resigned from the company.
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The Nigerian Electricity Regulatory Commission (NERC) has announced the removal of all the directors in Kaduna Electricity Distribution Plc (KAEDC) over its inability to pay the debt owed to the Nigerian Bulk Electricity Trading Plc (NBET).
This was contained in a document dated 1 January, signed by the NERC Chairman, Sanusi Garba, and Vice Chairman, Musiliu Oseni.
The commission said the order takes effect from 1 January and remains in force until amended or revoked by subsequent orders issued by the commission.
“All directors of KAEDC are hereby removed from office and the board of directors stands dissolved in the exercise of powers vested in the commission by section 75 of the Electricity Act (EA).
“Dr Umar Abubakar Hashidu is hereby appointed as the administrator of KAEDC further to section 75 of the EA,” the commission said.
The commission explained that the administrator shall be the de facto chief executive officer of KAEDC and shall be responsible for the management of the day-to-day affairs of the company pending the finalisation of the sale of the undertaking to a new core investor.
It said the administrator shall work with a team of special directors that shall constitute non-executive directors of the board for governance purposes.
“The following are hereby appointed as special directors for KAEDC: Alex A. Okoh – Chairman, Kabir Adamu, Sharfuddeen Zubair Mahmoud, John Ayodele and Rahila Thomas,” NERC said.
NERC said the executive management team that will work with the administrator will be constituted by the commission and announced in due course.
“The commission shall administer the sale of the undertaking in accordance with the provisions of the EA on the basis of the highest and best price offered for the undertaking,” it said.
Background
The commission noted that KAEDC has consistently failed to meet its obligations to the market in contravention of the electricity act and the terms and conditions of its electricity distribution license issued by the commission.
It added that the management, board and shareholders of KAEDC have been granted ample opportunities to address the utility’s failing performance at meetings with the commission; and they have been unable to cure the utility’s failure.
It explained that KAEDC was issued the statutory 60-day notice to show cause on 15 May 2023 and the management, board and shareholders were unable to show cause in writing within the specified timeframe as to why the utility’s distribution license should not be cancelled.
It further explained that the commission granted a 30-day extension, with effect from 20 July 2023 to the management, board and shareholders of KAEDC to provide justifiable cause in writing and they have been unable to do so.
It added that the extent of non-performance was further reiterated by a letter dated 31 July 2023 from KAEDC’s Chief Finance Officer, where he confirmed unequivocally that the utility was not in a position to comply with the basic market requirement of providing a bank guarantee in favour of NBET in compliance with the market rules and subsisting orders.
It said the commission met with Afrexim’s leadership following the expiration of the final 30-day extension and they confirmed that their transaction advisor would need four to six months to finalise the divestment process and that they could not provide the bank guarantees required to secure KAEDC’s market obligation.
“As at 1 October 2023, KAEDC owes NBET and Market Operator (MO) over NGN 110 billion and stands at risk of direct receivership if the utility’s continued participation in the electricity market as presently constituted at the management, board and shareholder level is allowed to continue without urgent regulatory intervention.
Yusuf Yahaya, the managing director and the chief executive officer of Kaduna Electric, had recently resigned from the company.
Support PREMIUM TIMES’ journalism of integrity and credibility
Good journalism costs a lot of money. Yet only good journalism can ensure the possibility of a good society, an accountable democracy, and a transparent government.
For continued free access to the best investigative journalism in the country we ask you to consider making a modest support to this noble endeavour.
By contributing to PREMIUM TIMES, you are helping to sustain a journalism of relevance and ensuring it remains free and available to all.
Donate
TEXT AD: Call Willie – +2348098788999
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