Why Did Ibadan Electric, IBEDC Go Into Insolvency And Receivership By AMCON? Slothfulness In Business



The Oasis Reporters


January 24, 2022

 

 

IBEDC, Tunde Ayeni



By Greg Abolo



The Assets Management Corporation of Nigeria (AMCON) has taken over the Ibadan Electricity Distribution Company(IBEDC) Ltd over insolvency.




When you read

Awo: The Autobiography of Chief Obafemi Awolowo by Obafemi Awolowo (1960)
Chapter 15: Eight Years of Office,

 


Something strikes you as embedded in certain officials to just be one thing: unbusinesslike in an environment that demands seriousness, leading to failing dreams.

Read on:



“…Apart from administrative impediments, we did recognise that there were also financial hurdles of a mountainous height to be overcome. But we were determined to blast our way through them all, and compel the force of any adverse circumstance to serve our will. …One aspect of economic development which we vigorously pursued is the provision of basic services. We recognised from the outset that there must be electric power, a good and reliable water supply, and efficient means of communication, if economic development is to be well founded..





..aThe Electricity Corporation of Nigeria [ECN] which is a Federal set-up was not up-and-doing enough for our purpose. But under the law no other agency could generate electricity without a licence from the Federal Government. This was an intolerable handicap.




We, therefore fought and succeeded in getting a provision inserted in the Constitution that a Regional Government or its Agency could generate electricity without obtaining a licence from the Federal Government. The result of this provision was a change in attitude on the part of the ECN.


After due negotiation, the Western Region Government granted the ECN a loan of £1.3 million free of interest for a number of years, in order to speed up the provision of electric power in the Region both for domestic and industrial purposes.




Back to the story of the IBEDC.

The Chief Operating Officer (COO) Engineer John Ayodele disclosed the depressing news of the receivership in a memo to members of staff intimating them of the development.




Ayodele, in the January 20 memo, said the company fell under receivership by a September 8, 2021 Federal High Court judgment.



The judgment, he said, granted preservative orders in favour of AMCON.



He explained the government corporation has appointed a lawyer to serve in the receivership action.




He disclosed that the receiver arrived on Thursday January 20 to take charge formally, hinting that he already held a meeting with the management staff.



Ayodele, however, allayed fears over the development and assured staff of job security.




The takeover of IBEDC includes the assets, shares and interests in related companies and entities, in addition to the monies kept in banks.




“Further, to the judgment wherein the Federal High Court on the 8th of September 2021 granted preservative orders in favour of Asset Management Corporation, AMCON, (being the Receiver/Manager of Integrated Energy Distribution and Marketing Limited); the court has appointed Mr Kunle Ogunba Esq.SAN to act as Receiver/ Manager Nominee in the receivership action,” Mr Ayodele said.





Mr Ayodele also disclosed that the receiver appointed, Mr Ogunba, had already held a meeting with the management staff.




The action follows the judgement by the Federal High Court on September 8, 2021, which granted orders in favour of AMCON as Receiver/Manager of Integrated Energy Distribution and Marketing (IEDM) Limited, IBEDC’s core investor, over defaults in a Loan Service Agreement with Polaris Bank.



The takeover also includes the assets of IEDM, including shares and interests in related companies and entities, in addition to the monies kept in banks.




In 2018, the NERC in an order on June 19, 2018, directed IBEDC to commence the process of dissolution of its Board within 21 days period, citing alleged delay in the repayment of some loans by IBEDC investors.



The loan was granted by IBEDC from funds released to all DisCos by the CBN under the Nigeria Electricity Market Stabilisation Funds (NEMSF) for the purpose of improving the networks and reducing aggregate technical, commercial and collection losses.



The IBEDC, led by Tunde Ayeni, responded that the electricity company had completely fulfilled its financial commitments.


In response, the directors of the electricity company sued NERC for its decision to suspend them from the Board of IBEDC.


In July 2020, the Federal High Court in Abuja set aside the order from NERC that removed the Tunde Ayeni led Board of Directors of the IBEDC.


The question everyone’s asking is this, why couldn’t IBEDC work things out to provide electricity to it’s teeming users eager to pay for services, get money and sort out it’s indebtedness, then live a good corporate life free from stress ?


That is the question we shall be tackling when we revisit IBEDC.


With Agencies reports.







Greg Abolo

Blogger at The Oasis Reporters.

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