CEC Africa Investment Limited (CECA), a major shareholder of Abuja Electricity Distribution Company (AEDC) said Xerxes Global Investment Ltd failed to pay the $41 million equity contribution for both firms to acquire AEDC. Xerxes has not shown any capacity to repay its part to CECA, six years after the privatisation, a statement by CECA on Monday said.
CECA said it was reacting to a statement by Xerxes’ Chairman, Ambassador Shehu Malami quoted to have said, it was his goodwill that paved way for CECA to join Xerxes, to form KANN Utility and acquired AEDC.
But CECA said in business, the investment funding matters too and not just goodwill. Both firms needed to raise money to acquire a 60 percent take of the DisCo.
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 Mr Emmanuel Katepa, the Managing Director of CECA.
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 in the statement 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,” Katepa noted.
CECA said rather than Xerxes paying its equity share which it has failed to for over six years, it was interested in using cabals to force them out of AEDC even when they bear the entire liability and have invested much in the DisCo.
“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.”