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Home Energy DisCos ask court to stop FG’s forensic audit

DisCos ask court to stop FG’s forensic audit

Electricity distribution companies (DisCos) have dragged the federal government to court over alleged undue interference in their business operations.

The federal government holds 40 percent shares in the power firms.

The suit, seen by TheCable, was filed at the federal high court in Abuja on May 14 by 10 DisCos.

The applicants are Abuja, Ibadan, Eko, Ikeja, Kaduna, Kano, Jos, Benin, Enugu and Port Harcourt electricity distribution companies.

The DisCos asked the court to stop the Nigerian Electricity Regulatory Commission (NERC) from conducting a forensic audit of their operations.

Other respondents are the national economic council, attorney-general of the federation (AGF) and Transmission Company of Nigeria (TCN).

“An order directing that the grant of leave shall operate as a stay of any further action(s) or proceedings by the respondents, their officers, employees, servants, agents, privies, related parties and any other person acting through or on behalf of the respondents, howsoever described, from, in any manner whatsoever, (i) acting in connection with the notice of forensic audit issued by the 1st respondent or such similar letter(s), notice(s) or instrument(s), and (ii) conducting a forensic audit of the applicants’ operations pending the hearing final determination of this action and/or further direction by this honourable court,” court papers seen by TheCable read.

“The 1st respondent is now taking steps to conduct the forensic audit and compel the applicants to inter-alia present their financial, administrative and relevant technical records, books, accounts and other documents including the applicants’ minutes of meetings to the forensic auditors appointed by the 1st respondent to conduct the forensic audit.

“The applicants are apprehensive that the 1st respondent will impose sanctions on the applicants and their directors, if the applicants fail to comply with the notice of forensic audit and/or co-operate with the forensic auditors appointed by the 1st respondent.

“The applicants’ could not bring this application before the expiration of the notice period in the notice of forensic audit because of the ravaging COVID-19 pandemic and the lockdown restrictions and other measures put in place by the government to curb the spread of the virus.”

A top official in one of the DisCos who spoke with TheCable on condition of anonymity, said meddling in the operations of firms when they have boards is unacceptable.

“There are so many issues we are battling with in the power sector. We are private companies and we cannot take the interference anymore. That’s why we have decided to take this to court,” the official said.

“The federal government is pushing the DisCos as though it’s their business. If you have the normal equity, you have the right to do all that.

“The government said it will provide two-month electricity for Nigerians because of COVID-19. Now, people are not paying. It’s seriously affecting our collection. Yet, they expect us to remit one-hundred percent.”

In November 2019, the national economic council appointed Nasir el-Rufai, governor of Kaduna state, as head of the audit committee.
Sale Mamman, the minister of power, had earlier warned DisCos to step up capacity saying the federal government could not continue subsiding electricity without a positive outcome.

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