The Executive Director of the Ghana Center for Democratic Development (CDD Ghana), Professor H Kwasi Prempeh, has described the fine that has been slapped on the board members of the Electricity Company of Ghana (ECG), as a very important development in the corporate governance of state-owned enterprises (SOEs) in Ghana.
The Public Utilities Regulatory Commission (PURC) fined the ECG board members an amount of Five Million, Eight Hundred and Sixty-Eight Thousand Ghana Cedis (GHS5, 868,000.00) for failing to notify its customers about power outages between January and March this year.
This was contained in an order statement released by the PURC on April 15, 2024.
“For failure to comply with the 3-day statutory notice required under Regulation 39 of L.I. 2413, the Commission in accordance with Regulation 45 of L.I. 2413, hereby imposes a regulatory charge of 3,000 penalty units on ECG for each of the 163 breaches, amounting to Five Million, Eight Hundred and Sixty-Eight Thousand Ghana Cedis (GHS 5,868,000.00).
PURC fines ECG Board members GHC5.8m for failing to notify public of power outages
“The Commission has determined that having regard to the nature of ECG’s ownership and business, the imposition of the penalty of Five Million, Eight Hundred and Sixty-Eight Thousand Ghana Cedis (GHS 5,868,000.00) on ECG would be counter-productive, as payment from ECG’s revenue would have a rebounding adverse effect on quality of service and consumers who pay tariffs to the company,” the PURC stated.
It noted that “in the interest of justice and to protect the interests of consumers, the
Commission shall hold the Board Members of ECG who were in office between 1 January to 18 March 2024 liable for the payment of the Five Million, Eight Hundred and Sixty-Eight Thousand Ghana Cedis (GHS 5,868,000.00). These Board Members were at all material times responsible for providing strategic direction to ensure the provision of safe, adequate, efficient, reasonable and non-discriminatory service to consumers.”
The PURC further directed that “The Board Members of ECG in office between 1 January to 18 March 2024 shall pay the regulatory charge of Five Million, Eight Hundred and Sixty-Eight Thousand Ghana Cedis (GHS5,868,000.00) into a dedicated fuel account under the joint control of the Ministry of Energy and the Ministry of Finance on or before 30th May, 2024. The Commission will validate compliance in tandem with its Cash Waterfall validation reports and periodic regulatory monitoring.”
Commenting on this matter on his Facebook page, Prof Prempeh said “Very important development in the corporate governance of Ghana’s SOEs–that is, if it is taken seriously and enforced, as it must!
“The governance and operations of our SOEs will not change for the better as long as a directorship is just another patronage appointment with hefty perks but no accountability of any kind, including no personal liability for acts or omissions in breach of the fiduciary duty a director owes to the entity.
“To enhance enforcement, our laws must give citizens a right to bring a private cause of action–similar to a shareholder derivative suit or to an Article 2 constitutional suit–to enforce the fiduciary obligation of SOE directors.”
Below is his full…
Very important development in the corporate governance of Ghana’s SOEs–that is, if it is taken seriously and enforced, as it must! The governance and operations of our SOEs will not change for the better as long as a directorship is just another patronage appointment with hefty perks but no accountability of any kind, including no personal liability for acts or omissions in breach of the fiduciary duty a director owes to the entity. To enhance enforcement, our laws must give citizens a right to bring a private cause of action–similar to a shareholder derivative suit or to an Article 2 constitutional suit–to enforce the fiduciary obligation of SOE directors.
“The Commission has determined that having regard to the nature of ECG’s ownership and business, the imposition of the penalty of Five Million, Eight Hundred and Sixty-Eight Thousand Ghana Cedis (GHS 5,868,000.00) on ECG would be counter-productive, as payment from ECG’s revenue would have a rebounding adverse effect on quality of service and consumers who pay tariffs to the company.”
“For that reason, in the interest of justice and to protect the interests of consumers, the Commission shall hold the Board Members of ECG who were in office from 1 January to 18 March 2024 liable for the payment of the Five Million, Eight Hundred and Sixty-Eight Thousand Ghana Cedis (GHS 5,868,000.00).”
It said these board members were at all material times responsible for providing strategic direction to ensure the provision of safe, adequate, efficient, reasonable and non-discriminatory service to consumers.
The board members of ECG in office from 1 January to 18th March 2024 “shall pay the regulatory charge of Five Million, Eight Hundred and Sixty-Eight Thousand Ghana Cedis (GHS5, 868,000.00) into a dedicated fuel account under the joint control of the Ministry of Energy and the Ministry of Finance on or before 30th May 2024.
In addition to honouring its ongoing obligations under the Cash Waterfall Mechanism, the PURC ordered ECG to pay the amount of GHS446,283,706.29 to the Category B beneficiaries under the CWM.