Our attention has been drawn to the publication in some National dailies of Wednesday November 20th 2019 on the Abuja Electricity Distribution Company (herein referred to as “AEDC”) which contained unverified but purely misleading report that KANN Utility Company Ltd, the core investor in Abuja Electricity Distribution Company, AEDC, has decided to sell its 60% equity stake in the distribution company due to constant squabbles over stakeholders’ debt. Nothing could be further from the truth; In the same news reports, several issues concerning the ownership of shares in AEDC were simply misrepresented for reasons that are anything but altruistic.
First and foremost, we wish to respond to the cheap lies being recycled in the media space that attempts were made several times before now to represent that CEC Africa (CECA) of Zambian, not Xerxes paid $81m cash (as equity) as well as raised another $123m loan security to acquire AEDC. The truth of the matter is that it was the goodwill of the Chairman of AEDC, His Royal Highness Amb. Alh. Shehu Malami, that actually paved way for CECA and Xerxes through KANN as a special vehicle to even have access as well as win the bid.
Similarly, it is important that we prick the balloon of lies peddled by those who are all out to mislead members of the public that it was because CEC of Zambia owns 75% equity in AEDC that made it possible for UBA to approve the loan facility for it. UBA disclaimed this and insisted it could not impose conditions on a Company it owns no share in but only a financier. The truth of the matter is that CECA owns only 30% in AEDC, but misled its parent company in Zambia that it owns majority shares with the sole intent of sourcing for capital from Zambia Stock Exchange. This is a clear indication of how desperate they are for CECA to short-change other shareholders in AEDC.
In the same vein, CECA misrepresented that it injected funds into KANN as investment. The reality is that the fund was indeed a loan to KANN which is to be repaid by the company. So, technically, there is no evidence to date of equity investment made by CECA either at the CBN, UBA or any other Regulatory Agency of Government of the Federal Republic of Nigeria to establish that. Rather, they obtained a loan for KANN at exorbitant interest rate of double digit over London Inter-bank interest rates (LIBOR). The so-called AEDC stakeholders’ war is a premeditated agenda fuelled essentially by greed with a view to forcefully taking over majority shares in the company which the Nigerian shareholders have vehemently resisted. It is for this reason that CECA unilaterally proposed to amend the Articles of Association of KANN targeted at disenfranchising Xerxes, a development that underpinned Xerxes’ decision to take the matter to Court to prevent an Extra-ordinary General Meeting from taking place. The case is still in the Nigerian court of law.
Another issue that has contributed significantly to the crisis currently rocking AEDC is the refusal by the Board of Directors of AEDC at its meeting held recently to renew the tenure of its Managing Director in accordance with the provisions of NERC regulation on local content, which states explicitly that an expatriate can only be appointed when there are no Nigerians with the requisite experience and expertise to occupy such positions. This they have equally made every effort to resist unsuccessfully. In another move reminiscent of the rough tactics usually employed by footballers that if you miss the ball, don’t miss the leg, since his bid to have his tenure renewed was refused by the Board, the MD has allegedly refused to cooperate with subordinate staff. The Board similarly resolved at that meeting that the position of the MD and other positions previously occupied by foreigners be made open for both Nigerians and non-Nigerians alike to vie in a spirit of fair-play. Why the incumbent MD is not comfortable with this position of the board is simply baffling, but we suspect there are issues he may want to conceal.
For a better appreciation of the facts of this case, let us mount the horse and gallop down the memory lane of history. It would be recalled that Amb. Alh. Shehu Malami in 2012 started the process of acquiring shares in AEDC with the formation of Xerxes Ltd with other notable Nigerians like Mr Felix Oheiweri, Alh. Maiyaki and Mr Jones etc.
In 2013, Amb. Alh. Shehu Malami and other Nigerians came together to form KANN and invited Copper Belt of Zambia to buy 50% 0f KANN (an abbreviation of Kogi, Abuja, Niger and Nasarawa), with which they bided for AEDC. In KANN, Nigerians own 50% shares, while the Zambians own the remaining 50%. In the AEDC, Federal Government owns 40%, while KANN owns 60%. For the purpose of brevity, the 60% is jointly owned by Xerxes Nigeria Ltd and CEC Africa on 50-50 basis (or in effect 30% & 30%). This is the true position with Corporate Affairs Commission (CAC) as at today.
Rather than signing reconciliation agreement reached when the office of Attorney General of the Federation and Minister of Justice appointed the Bureau for public Enterprises to reconcile the shareholders disputes between both parties, CECA failed to do that and instead wrote to the BPE saying that it was more interested in registering the spurious arbitration award obtained from London. So, this means that CECA was not interested in being repaid but rather to illegally dispossess its local partners. It is also worthy of note that XERXES Global Ltd, despite being a co-borrower of the facility from UBA, has never been allowed access to KANN accounts and has been kept in the dark on the dealings over KANN accounts.
CECA of Zambia intentionally side lined Xerxes from the financial transactions of the bank account of KANN by not submitting its nominees as signatories to the account, which even at the Bank may appear to be a violation of the requirements for opening and operating Company Accounts. In the corporate world, this is tantamount to illegally elbowing a partner out of business to thrive on illegality.
At this juncture, the pertinent question to ask is: who is fooling who?
Amb. Alh. Shehu Malami is the former Nigeria’s Ambassador to South Africa.
