…Engages in frustrating DisCo’s growth
More facts are emerging as CEC Africa Investment Limited (CECA), a major shareholder of Abuja Electricity Distribution Company (AEDC) has disclosed the failure of Xerxes Global Investment Ltd since 2013 to pay its $41 million equity contribution for both firms to acquire AEDC.
Further, according to a statement on Monday by CECA, Xerxes has not shown any capacity to repay its part to CECA, six years after the privatisation was concluded in 2013.
These disclosures CECA said were in reaction to a statement by Xerxes’ Chairman, Ambassador Shehu Malami who allegedly claimed that it was his goodwill that paved way for CECA to join Xerxes, to form KANN Utility and acquired AEDC.
However, CECA maintained that in business, the investment funding matters too and not just goodwill. It said both firms needed to raise money to acquire a 60 percent stake of the DisCo.
The Managing Director, CEC Africa, Mr Emmanuel Katepa, maintained in the statement that Xerxes could not, but left only CECA to provide funding for KANN to pay the initial $41 million to the Bureau of Public Enterprises (BPE) and further provided security cover for the $123 million loan KANN took from UBA.
“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,” said Katepa
Although Malami alleged that CECA prevented his firm, Xerxes from being signatories to the bank account of KANN, minutes of a KANN board meeting held in October 2017 shows that the Chairman of CECA, Mr Siyanga Malumo did not object to Xerxes providing signatories.
Katepa said: “They (Xerxex) were struggling to organise themselves to provide the signatories and we expressed our support. They have not, to this day completed their Know Your Customer (KYC) with the bank. You can verify this from the Company Secretary of KANN who is a Xerxes person.
“Just last month, I sent Mr. Malami the entire bank statements from inception – even when the failure to be a signatory is of his own making. There is nothing to hide and they have as much information as we have access to.”
CECA said rather than Xerxes paying its equity share which it has failed to pay for over six years, it was interested in using cabals to force CECA out of AEDC even when it (CECA) is bearing the entire liability and have invested much in the DisCo.
According to the statement, “Xerxes should answer the question, did they fund the acquisition? Does goodwill translate to funding? The London Arbitration and the Federal High Court in Abuja all ruled in favour of CECA as the major investor, Malami is frustrating the enforcement of our rights as the core investor in AEDC.
“This is bad in promoting President Muhammadu Buhari’s ‘Ease of Doing Business in Nigeria’. It will also scare off investors from the power sector at a time when the sector needs so much Foreign Direct Investments (FDI) to provide increased, stable and constant electricity supply to the yearnings of Nigerians.”