Examining the Boardroom Crisis in Eko Disco
The boardroom fight that is almost engulfing Eko Electricity Distribution Company Plc (EKEDC), easily one of the best performing among Nigeria’s 11 power Distribution Companies (Discos), appears more of a battle of personal interests, rather than corporate and altruistic gains,
Afew days ago, the news broke that the leadership of the EKEDC board had removed and indeed asked the Managing Director of the power distribution firm, Dr. Tinuade Sanda, to return to the parent company, WPG Limited, where she was said to have been seconded from.
The decision taken by the headship of the board to ‘remove’ the chief executive of the company was communicated through a letter signed by the EKEDC Chairman, Dere Otubu, on March 25.
He cited a directive from the Nigeria Electricity Regulatory Commission (NERC), purportedly stating that all staff working for the utility must be employed directly by the utility, bound by applicable service conditions that are applicable to the employees of the utility, and paid through the utility’s payroll.
“The Disco is obligated to comply with these directives due to the powers of NERC as stipulated in the Electricity Act 2023. In compliance with the aforementioned directive, all seconded staff from WPG Ltd are being released by Eko Electricity Distribution Plc and returned to WPG Ltd.
“Accordingly, you are hereby relieved of your role, office, and position at Eko Electricity Distribution Plc effectively immediately, and returned to your employer, WPG Ltd,” Otubu said.
However, beyond the wholesale interpretation given to the NERC memo by the chairman, there were said to be undercurrents which spurred that decision to push Sanda out. Genesis of a Crisis Findings revealed that trouble started when Sanda issued queries to three senior members of staff of the electric company demanding an explanation over the status of two personnel presumed to be ghost workers and two others left on the payroll after their resignations.
The queries were served on the Chief Legal Officer (CLO), Wola Joseph-Condotti who was alleged to be the main culprit, the Chief Human Resource (CHRO), Aik Alenkhe, and the Chief Audit and Compliance Officer (CACO), Sheri Adegbenro, reportedly for negligence of duty not to have detected the infractions.
As a result, it was learnt that almost N100 million was lost in salaries and bonuses paid to the alleged ghost workers, and two former employees left on the payroll after their resignation for the period the anomaly existed.
According to the report, the staff who were assumed to have been seconded to the legal department of the electric distribution firm enjoyed unilateral promotion for three years, leading to huge salary payments, among other benefits.
Sensing that something was amiss, Sanda requested an explanation from the three departmental heads responsible directly or indirectly for the actions that were believed to have flouted the rules.
The queries to the three senior management staff who themselves were seconded to EKEDP from WPG led to squabbles. While the managing director ordinarily should be supported to deal with the violations, it became a matter of politics for some members of the board, who wanted Sanda to stay away from cleaning the mess, it would seem.
When this sentiment by the board slowed down the process of sanctioning those said to have broken the rules, the unions then decided to escalate the matter to the regulator, thereby compelling the board of EKEDC to set up a disciplinary committee to look into the matter.
Controversial Panel Findings
It would be safe to surmise after a careful study of the report on the investigation by the committee, that there were, perhaps attempts to downplay the issues, which ordinarily were as clear as daylight.
Despite what appeared clear evidence flowing from testimonies, the committee concluded that: “Fraud was not established against any staff, as no staff was found to have benefited directly or indirectly from the funds paid to the ghost workers.”
It added that: “Rather, in the course of investigations, some administrative lapses were discovered.”
Sources with knowledge of the goings-on within the company wondered how the infraction could have gone on for that long without the heads of those departments affected knowing, given that they have to validate and certify staff that should be paid for every of the months in question.
The committee’s submission and recommendation, it was gathered, completely deviated from the template already created in the past, for disciplining errant staff with the strict application conditions of service, leading certain employees being fired in the past.
In this case, while the CLO was asked to proceed on two weeks’ leave of absence, which was deemed already served, the CHRO and CACO were issued warning letters. Many believe that the committee that decided their cases were careful not to hurt their benefactors. This, however, would come at a cost to the company.
So, when the rumour of the purported removal of the chief executive officer of the company, who insisted that due process be followed started circulating, it was what it was, politics at the expense of truth.
NERC & MOFI
To be sure, the industry regulator tried to stamp its authority when the matter became public, but the seeming ambiguity of its statement which opened it to various interpretations by parties involved, was a cause for concern.
However, the Ministry of Finance Incorporated (MOFI) which recently took over the ownership of the 40 per cent holdings by the government in the Disco from the Bureau of Public Enterprises (BPE), seemingly failed to act on the side of fairness.
What role could MOFI or BPE as 40 per cent equity holders have played to put a stop to the boardroom games that were going on at the expense of the growth of the company?
On its part, noting the strong public interest generated by the events at the firm, NERC which provided further clarifications, said : All staff of EKEDC, irrespective of their form of engagement, will be subject to the conditions of service of EKEDC.
“The commission deemed it necessary to pass this resolution based on the submission of EKEDP, at the meeting of 20 March 2024, that the Condition of Service (CoS) of EKEDP was not applicable to seconded personnel from third party providers”.
It explained that EKEDC board was expected to conclude its review of its investigation into the allegation of ghost workers to identify all personnel involved in causing loss of revenues to the company no later than March 27, 2024.
“In a case where the indicted parties are seconded from third party providers and since they are reportedly not subject to the EKEDC CoS, they are to be recalled to their parent companies to avoid the risk of further losses to EKEDC,” it added.
It therefore bears cognisance that NERC and MOFI , could use their positions to do what is right for the company, no matter whose ox is gored, including protecting Sanda and members of her team who insisted on putting the good of EKEDC before personal interest.
A History of Achievements
Under Sanda, it would appear without doubt that Eko Disco has unarguably emerged one of the two most well-run power utilities by many indicators. For instance, the last National Bureau of Statistics (NBS) electricity report for Q4, showed that in terms of revenue collection, Eko Disco (EKEDC) was second with N50.18 billion.
With 690,032 customers, according to the report, electricity supply by the Disco during the period was 6,432 (Gwh) in Q4, 2023 from 5,732 (Gwh) in the previous quarter. Eko also had 934 Gwh billed, one of the highest in the sector.
Besides, the distribution company collected N14.9 billion as of March 28, 2024, recording a peak collection of about N17.1 billion in January 2024.
Coincidentally, Sanda on her social media handles during the week, while celebrating her second anniversary as the MD of the Disco, revealed the many achievements of the Disco.
“I am filled with pride over our victories against all odds: achieving a record collection of N14.9 billion as of March 28, 2024 and cutting Aggregate Technical and Collection (ATC & C) losses to 4 per cent. Not to mention that our peak collection moment of N17.1 billion in a single month, achieved in January 2024, stands as a testament to our commitment and hard work.
“These milestones have significantly propelled our service and efficiency forward. Following our recent strategy session in February 2024, we set an ambitious target for ATC & C losses at 11.85 per cent.
“Yet, we’ve surpassed expectations by achieving a remarkable single-digit rate of 4 per cent just a month later,” she pointed out, stressing that the strategy was always to embrace resilience, firmly believing that no goal or challenge is insurmountable.
Despite challenges faced by her, she promised to do more, having been inspired by Michelle Obama’s words, “When they go low, we go high.”
A day later, describing the moment as a finest anniversary gift which had come from the highachieving EKEDC team, she added that as of March 29, the company had catapulted its ATC & C efficiency to an outstanding 3 per cent, a significant leap from the 4 per cent recorded just a day before.
Also, she stated that the collective triumph had propelled EKEDC’s total collection to an impressive figure of N15.2 billion as of that day.
Earlier, on March 16, 2024, EKEDC, also commissioned a state-of-the-art 2 X 20 MVA Randle Injection Substation for customers within the Surulere axis of its franchise area. The substation added about 30 megawatts of power to that area will profile relief for existing substations, thereby removing the possibility of load-shedding.
EKEDC under Sanda has also committed to bridging the metering gap entirely by 2028 with a realistic and achievable plan of metering 120,000 customers yearly within the next five years.
No reasonable firm worth its salt, it is believed, would sacrifice competence on the altar of politics.