April 16, 2024

Debt: Benin DisCo cautions Fidelity bank, FG, threatens legal actions against take-over

Oredola Adeola

Following the announcement by Government on the plan to restructure the management of five electricity distribution companies (DisCos) for their inability to honour debt obligations to their banks, the management of the Benin Electricity Distribution Company (BEDC) has cautioned Fidelity Bank that it lacked legal authority to take over the company.

Mr Ibeamaka Odoh,  BEDC’s Corporate Affairs Officer, in a statement issued on Thursday, warned that attempt by Fidelity Bank and the BPE to interfere with its operations would be illegal, unlawful and would be resisted before the Court.

EnergyDay on Tuesday, published a statement jointly signed by the Executive Chairman of the Nigerian Electricity Regulatory Commission (NERC), Malam Sanusi Garba, and the Director-General of the Bureau of Public Enterprises (BPE), Alex Okoh, announcing the plan to take over the the management of the five DisCos on the sideline of Fidelity Bank’s  activation of the call on the collateralised shares of Kano, Benin and Kaduna DisCos in exercise of its rights to the company’s shares.

Meanwhile BEDC in a statement on Thursday insisted that its shares were not offered as collateral security to Fidelity Bank or to any other party.

BEDC said, “The management of BEDC states unequivocally, that there is no contractual, statutory or regulatory basis for such takeover.

“For the avoidance of doubt, the shares of BEDC have not been given as security to Fidelity Bank or to any other party.

“There was a report that certain parties had been appointed as board members, independent directors and managing director of BEDC.

“We understand these appointments have been communicated to the Bureau of Public Enterprises (BPE) and the Nigerian Electricity Regulatory Commission (NERC).

“As we understand it, Vigeo Holdings Ltd. (VHL), a non-shareholder of BEDC, obtained credit facilities from Stanbic IBTC Bank Ltd., Fidelity Bank Plc, and Keystone Bank Plc.

“We further understand that the said credit facilities and any enforcement action in relation thereto have in the meantime become subject of litigation,’’ Odoh stated.

BEDC urged its customers, investors and partners in the electricity business to ignore the takeover move.

Odoh assured customers of continued smooth operations, adding that BEDC would remain focused in its mission to ensure delivery of quality and reliable power to Edo, Delta, Ondo and Ekiti states.

Meanwhile the Engr. Abubakar Aliyu, Minister of Power,  has revealed that the ministry will ensure that the changes in corporate governance do not disrupt  the services of the  Distribution Companies (DisCos) to their customers.

The Minister confirmed that he had been briefed by the Nigerian Electricity Regulatory Commission (NERC) and Bureau of Public Enterprise(BPE) on the recent events relating to corporate governance in Kano, Benin, Kaduna, lbadan and Port Harcourt DisCos.