bedc-challenges-bpe’s-takeover,-plans-uk-arbitration

• Ex-UK PM’s wife, Blair, Olanipekun lead Disco team

Benin Electricity Distribution Company Plc has dragged the Bureau of Public Enterprises, an agency of the Federal Government, to a United Kingdom arbitration to challenge the takeover of BEDC by Fidelity Bank Plc.

It was also gathered on Monday that the UK’s ex-Prime Minister’s wife, Cherie Blair, who is the Chair of Omnia Strategy LLP, and Bode Olanipekun, of Wole Olanipekun & Co., were leading BEDC’s legal team.

Last month, the Federal Government announced the planned takeover of Kano, Benin and Kaduna electricity distribution companies by Fidelity Bank Plc after the bank initiated action to take over the boards of the three Discos.

It also announced through the BPE that with the takeover of Ibadan Disco by the Asset Management Corporation of Nigeria, the bureau had obtained approval from NERC to appoint an interim managing director for the distressed power firm.

The government had further stated in its restructuring notice that it was restructuring the management and board of Port Harcourt Disco to forestall the imminent insolvency of the utility. The notice was signed by the Director-General, BPE, Alex Okoh; and Executive Chairman, NERC, Sanusi Garba.

Last week, The PUNCH reported that legal advisers to Vigeo Power Limited, majority shareholders of BEDC, had commenced contempt proceedings against the BPE, describing the bureau as defaulters involved in the illegal takeover of the Disco.

This came as an Omnia Strategy LLP document, seen in Abuja on Monday, and addressed to the Director-General, BPE, Alex Okoh, stated that the bureau’s improper action had VGL’s commercial interests and reputation to suffer through the forceful takeover of BEDC.

The document, dated July 14, 2022, and made available to our correspondent by an impeccable source, was entitled, “Dispute Notice Under the Shareholders’ Agreement between Vigeo Power Limited and the Bureau of Public Enterprises.” It was signed by Cherie and Olanipekun.

It read in part, “Omnia Strategy LLP and Wole Olanipekun & Co are instructed on behalf of Vigeo Power Limited. As you know, VPL is the majority shareholder in BEDC Electricity Plc.

“Our client’s commercial interests and reputation have recently suffered, and continue to suffer significant harm as a result of the improper actions to expropriate our client’s interest in BEDC, through the attempted forceful take-over of BEDC, and purportedly initiated by Fidelity Bank Plc and facilitated by the Federal Government of Nigeria, through your good self (Okoh) and the Bureau of Public Enterprises.

“Accordingly, we write pursuant to Clause 16.2 of the Shareholders’ Agreement dated August 21, 2013, between the BPE, the Ministry of Finance Incorporated, BEDC and our client to notify you of the existence of a dispute.”

It added, “We hereby put BPE on notice of our intention to commence international arbitration proceedings if the dispute is not resolved within 10 days of receipt of this letter. We expect BPE to cease and desist from any further steps that may risk directly or indirectly damaging or impugning VPL.”

The law firm stated that it required the BPE cooperate with its client and use its best endeavours to reverse the recent steps that had compromised VPL’s interests in BEDC, as set out briefly below.

“In publications dated July 5 and 8, 2022, BPE and the Nigerian Electricity Regulatory Commission announced that (i) Fidelity Bank, as a lender to certain electricity distribution companies, including BEDC, had informed BPE that it had initiated action to take over the boards of the Discos; and (ii) pending the take-over, BPE and NERC had jointly appointed interim managing directors, chairmen and other non-executive directors for the affected Discos,” the firm stated.

It added, “As it relates to BEDC, our client regrets that BPE has facilitated the harming of our client’s interests, including through the purported reconstitution of BEDC’s board of directors.

“BPE, as the holder of 40 per cent of the issued share capital of BEDC is aware, or reasonably ought to be aware, that: Our client’s shares in BEDC are not charged as security in favour of Fidelity Bank or any other person;

“Fidelity Bank does not have any legal or contractual basis to interfere in the governance, management and operations of BEDC; The purported security interest on which Fidelity Bank relies is the subject of ongoing litigation in Suit No FHC/L/CS/239/2022 VPL Holdings Limited and 4 Ors v.

Stanbic IBTC Bank & 7 Ors.”

The law firm stated that as the suit was under judicial consideration, Fidelity Bank was precluded by law from taking any action in relation to the shares, including a change of directors in BEDC, pending the determination of the suit.

It stated that the process of appointing and replacing directors in BEDC was governed by the Companies and Allied Matters Act, 2020 and the Shareholders’ Agreement.

It argued that the improper purported removal and appointment of directors by Fidelity Bank and BPE did not follow the applicable contractual and statutory processes.

“By wrongfully facilitating the illegal actions of Fidelity Bank and disregarding the applicable law and the Shareholders’ Agreement, BPE has acted in bad faith and has breached its obligations to our client (both contractually and otherwise), which has undermined our client’s investment and caused VPL substantial damage,” Omnia Strategy LLP stated.

 It added, “Our client notes that BPE’s abuse of state power through the improper and actionable collusion with Fidelity Bank, together with its arrogation to itself, of powers which have no contractual, regulatory or statutory basis, is consistent with the persistent hostile attitude displayed by instrumentalities of the FGN to our client and other investors in the sector since the privatisation of the Power Holding Company of Nigeria’s successor companies.

“It is in this context that we notify you of the existence of a dispute, pursuant to Clause 16.2, and hereby nominate Dr. Echefu Ukattah as our authorised representative. We request that you also nominate one of your directors or other senior representatives as your authorised representative, such that VPL’s authorised representative and BPE’s authorised representative shall meet within

10 days of this letter – being July 24, 2022 – to resolve the dispute; failing which VPL will be left with little choice but to commence international arbitration proceedings and claim damages for all loss suffered by our client as a result of BPE’s breach of its obligations, as well as all of VPL’s other losses occasioned by various FGN state actors since our client acquired 60 per cent interest in BEDC.”

By Tochi

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