NERC fires all KAEDC directors dissolves board
The Nigerian Electricity Regulatory Commission (NERC) has fired all of the directors of the Kaduna Electricity Distribution Company (KAEDC).
NERC also removed all board directors from their positions in accordance with the commission’s authority.
The company owes N110 billion to Nigerian Bulk Electricity Trading Plc and Market Operator (MO).
This was stated in an order dated January 1st, 2024, which was signed by NERC chairman Sanusi Garba and Vice Chairman Musiliu Oseni.
The order was titled: “Order No: NERC/2024/00.”
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The commission said: “All directors of KAEDC are hereby removed from office and the board of directors stands dissolved in exercise of powers vested in the commission by section 75 of the EA.
“Dr. Umar Abubakar Hashidu is hereby appointed as the administrator of KAEDC further to section 75 of the EA. 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 utility pending the finalization of the sale of the undertaking to a new core investor.
“The administrator shall work with a team of special directors that shall constitute non-executive directors of the board for governance purposes.”
NERC said the following are hereby appointed as special directors for KAEDC-
i. Alex A. Okoh – Chairman
ii. Kabiru Adamu
iii. Sharfaddeen Zubair Mohamoud
iv. John Ayodele
vi. Rahila Thomas.
NERC recalled that KAEDC has consistently failed to meet its obligations to the market in contravention of the EA and the terms and conditions of the electricity distribution license issued by the commission.
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NERC noted that the management, board and stakeholders 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.
The commission recalled that KAEDC was issued the mandatory 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.
According to NERC, 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.
The order further revealed 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.
“The commission met with Afriexim’s leadership following the expiration of the final 30-day extension and they confirmed that their transaction advisor would need 4 – 6 months to finalise the divestment process and that they could not provide the bank guarantees required to secure KAEDC’s market obligation.
“As of 1 October 2023, KAEDC owes NBET and MO over N110 billion and stands at risk of direct receivership if the utility’s continued participation in the electricity market as presently constituted at management, board, and shareholders level is allowed to continue without urgent regulatory intervention.”
