FOLLOWING the continued feud between the CEC Africa (CECA) and Xerxes Global Investment, investors of KANN utility Company limited in charge of the Abuja Electricity Distribution Company (AEDC), CECA has insisted that it is entitled to a majority share in the company.
This according to it, is because its partner, Xerxes had breached a $41million funding agreement for acquiring the DisCo in 2013.
The Managing Director of CECA, Engr. Emmanuel Katepa in a statement issued at the weekend, in Abuja disclosed that during the privatisation exercise, there were financial obligations the bidders were expected to meet which prompted CECA and Xerxes to agree on the financial arrangements, starting with the initial payment of $41m to the Bureau of Public Enterprises (BPE).
However, he said six years after the agreement, its counterpart had failed to fulfil part of its agreement leaving all the payments to be made by CECA.
He further explained that the issue was taken to the London Arbitration Court where the judgment was passed in favour of CECA.
“This award was further recognised in the High Court of Nigeria in February 2018. Not pleased with this, Xerxes approached the Appeal Court sitting in Abuja, where the appeal is pending,” the statement partly read.
While reacting to claims by the Chairman of Xerxes Limited, Amb. Shehu Malami that his goodwill and name had facilitated the sale of AEDC to KANN Utility Company Limited, their consortium, he argued that goodwill could not have bought the DisCo.
“Till date, Xerxes has not shown any capacity to repay its part of that obligation to CECA, six years after the privatisation. Yet it wants to claim major ownership of AEDC but has failed to fulfil any financial obligation and has left the business risk on CECA.
“Ambassador Shehu Malami failed to address the central issue which remains that he and his organisation are claiming shares for which they have failed to pay and show no capacity to pay.
“In recognition of its failure to pay its share of the acquisition cost in 2013, Xerxes even pledged to CECA, as security, half of its equity share in KANN. At the time, the arrangement was expected to be cured within 120 days, during which time Xerxes was to source its contribution and pay its share. As we speak, Malami has not paid, yet is denying us the right to that majority equity stake,” Katepa noted.
He further said: “We have the facts. We have managed power utilities in several African countries and are transforming AEDC but Xerxes is frustrating this effort, insisting on the removal of the very qualified and experienced officials who, working hand in hand with Nigerian personnel, are making the change at AEDC possible to be replaced by unknown people with no recorded experience of managing any power utility.”
CECA insisted that having goodwill does not translate to financing the acquisition of the power utility firm.
“We will not be driven into silence for exercising our rights in steering the affairs of AEDC to improving the power supply experience of our esteemed customers,” Engr. Katepa concluded.