Financial Energy Review
…Discos Three years Financial Statement May Be Scrutinised…..
All the directors standing in for the Bureau of Public Enterprise (BPE) on the boards of various electricity distribution companies have been sacked forthwith.
Their sacking was predicated on the new arrangement whereby the Ministry of Finance Incorporated has now been assigned the responsibility of representing Federal Government Interest in any commercial organization in the country.
According to a letter sent to the Ministry of Power and Electricity successor companies(distribution companies) signed by the chief executive officer of MOFI, Dr.Armstrong Takang, and titled: ‘Re: Equity Holding of the Federal Government of Nigeria in Electricity Distribution, it states thus:
The BPE nominee director on the board of directors of this company is withdrawn with immediate effect.
“Share certificates issued by the company in the name of BPE should be withdrawn and canceled immediately.”
“ 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 the board meetings, current management operational reports, extant strategic business, and operating plans, management accounts, and audited financial statements going back to 2021, 2202 and 2023 financial years should be immediately delivered to MOFI”
The Ministry of Finance Incorporated (MOFI) on Friday revoked the power of attorney granted to the Bureau of Public Enterprises (BPE) to hold on its behalf the Federal Government equity holdings in the eleven successor electricity distribution companies (DISCos) of the defunct Power Holding Company of Nigeria (PHCN).
MOFI was incorporated under the provisions of Sections 2 and 3 of the Ministry of Finance Incorporated (MOFI) Act of 1959 as an asset holding company with a mandate as the sole manager of all federal government investment interests, estates, easement and rights as well as a strategic institution to support the Federal Government’s effort to address several economic challenges and spur a renewal of the economy.
Under its mandate, MOFI has, for decades, been in charge of the management of a significant portfolio of Federal Government investments in about 130 Government Owned Entities (GOEs) and Government Linked Companies (GLCs).
The decision to revoke and terminate the powers given to BPE to take charge of the Federal Government interests in the DISCOs is seen as an attempt by the agency to assert its powers to effectively discharge its mandate.
Takang said the repeal of the Electric Power Sector Reform Act 2005, coupled with the long-completed privatisation and sale of shares in the 11 eleven successor DISCos as well as the recent restructuring of the management and Board of MOFI had necessitated the formal termination of the power of attorney granted BPE.
By that decision, he said MOFI has effectively restored its control and management of the Federal Government equity interests in all the DISCOs.
Takang’s memo was sequel to a directive earlier issued by the Minister of Finance to the Board of MOFI to take immediate steps to revoke the power of attorney granted BPE to allow the agency assert its powers under its enabling Act.
Following the unbundling of the PHCN by the National Council on Privatisation (NCP) in 2013, eleven successor electricity distribution companies (DISCos) were created along with six generation companies (GENCos) charged with the responsibility of generating and distributing electricity throughout the country.
The eleven DISCos included Abuja Electricity Distribution Company PLC; Benin Electricity Distribution Company PLC; Eko Electricity Distribution Company PLC; Enugu Electricity Distribution Company PLC; Ibadan Electricity Distribution Company PLC; Ikeja Electricity Distribution Company PLC; Jos Electricity Distribution Company PLC; Kaduna Electricity Distribution Company PLC; Kano Electricity Distribution Company PLC; Port Harcourt Electricity Distribution Company PLC and Yola Electricity Distribution Company PLC.
With the conclusion of the privatisation of public assets in the power sector, shares in these successor DISCos were sold to private investors, with the Federal Government retaining 40 percent in each of them.
Pursuant to the powers vested on the NCP under the Electric Power Sector Reform Act 2005, BPE was authorised to oversee the implementation of the privatisation programme.
By virtue of the provisions of Section 9 of the EPSR Act, the Federal Government shares in the DISCOs were held by BPE through the instrumentation of a power of attorney granted in 2012 by MOFI, which is recognised as the legal and beneficial holder of the Federal Government interestin all public assets
Under the power of attorney, MOFI authorised BPE to be its lawful attorney and representative in the Boards and management’s of the 11 DISCos empowered to undertake various actions on its behalf towards ensuring effective achievement of the objectives of the privatisation exercise.
To give effect to the power of attorney, it was formally executed on November 1, 2013 following the completion of the privatisation exercise and the sale of the shares in the companies.
With the recent restructuring of the Board and Management of MOFI, with a renewed commitment for it to assume a more active mandate as the sole owner, manager and controller of all Federal Government interests in all government-owned and government-linked entities, the Federal Government directed MOFI to assert its powers under its establishment Act.
In an official memo No. REF/FMF/OHMF/MOFI/Assets/01, the Minister of Finance and Coordinating Minister for the Economy, Wale Edun, directed the Board of Directors of MOFI to immediately revoke and terminate all instruments and agreements, including the power of attorney granted BPE in 2012 in respect of the Federal Government shares in the 11 successor DISCos.
The memo entitled: “Termination of Power of Attorney Donated to the Bureau of Public Enterprises and Vesting of Equity Interest of the Federal Government of Nigeria the Ministry of Finance Incorporated” also directed MOFI to immediately assume ownership, control and management of all equity holding of the Federal Government in the DISCOs.
MOFI was equally directed to all appropriate notices, instruments and documents necessary to give effect to the directive.
On Monday, the Director General of BPE, Alex Okoh was sacked by the President as part of efforts to clear the way for effective discharge of the mandate assigned to MOFI.
Okoh was alleged to be working with the management of some of the privatised entities to frustrate attempts to appraise their performances, particularly by making it difficult for the relevant official to gain access to their financial documents.
