The Nigerian Electricity Regulatory Commission (NERC) has slammed a fine of N50 million to the Ibadan Electricity Distribution Company (IEDC).
The fine was on account of the failure of the company to secure a refund of an interest free loan the board of IEDC granted to its core investor group.
A statement by Dr. Usman Arabi , NERC Head of Public Affairs Department, said that commission found the company wanting on two grounds of inappropriate financial transactions and was subsequently fined the sum of N50 million.
Arabi said the fine was occasioned by the outcome of an open book review conducted on the financial records of IEDC.
According to him, information from the commission indicates that the industry regulator was also reviewing the utilisation of Nigeria Electricity Market Stabilisation Fund (NEMSF) in all other distribution companies.
He said that NERC, had, through its Order 173, directed IEDC to recover the sum of N5.7 billion being the balance of the inappropriate loan of N6 billion granted by the utility to the core investor in IEDC.
Arabi said the loan was sourced from a total sum of N11.367 billon disbursed to IEDC under the NEMSF granted by the Central Bank of Nigeria (CBN) for improvement of infrastructure in the company including metering.
He said that the repayment of the loan to CBN by the 11 distribution companies had continued to be made as a first charge on the revenues of the companies.
He said that NERC would ensure full recovery of the misused funds from IEDC including the accrued interest at 10 per cent.