Samuel Dubik Mahama
Members of the board of the Electricity Company of Ghana (ECG) have rejected the GH¢5.86 million fine imposed on them by the Public Utilities Regulatory Commission (PURC) over a failure to provide strategic direction for the running of the company.
The board, in a letter issued by their legal representative, contend that they are not responsible for the day-to-day operation of ECG hence could not legally be held accountable for any infractions.
The board further contends that the Commission lifting the legal veil of incorporation to impose the fine on it instead of the legal personality of the power distributor is illegal, as only a court of competent jurisdiction has the power to do so.
The PURC on April 16, 2024, imposed a regulatory charge of 3,000 penalty units on ECG amounting to GH¢5,868,000 for 163 breaches in contravention of Regulation 39 of L.I. 2413.
According to the Commission, this amount will be borne by the board members of ECG who were in office from January 1, 2024 to March 18, 2024.
The Commission decided to fine the board members after holding that “having regard to the nature of ECG’s ownership and business, the imposition of the penalty of GH¢5,868,000 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.”
Its basis for holding the Board Members personally liable is because “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.”
But the board members of ECG, in a letter signed by their lawyer Yaw Acheampong Boafo, argue that the PURC exceeded its powers by imposing the fine on the board instead of the company itself.
The board said it is not the principal officer of ECG, hence it is not responsible for the day-to-day administration of the company.
The letter avers that under Section 38 of Act 538, a default on the part of a public utility in the payment of a penalty may lead to the personal liability of a principal officer of the public utility.
It says under Section 49 of Act 538, a principal officer means the person responsible for the day-to-day administration of the affairs of the public utility and not the board.
“Board members of ECG are not responsible for the day-to-day administration of ECG and, therefore, are not principal officers within the intendment of Act 538 to be able to be held liable for a default on the part of the public utility ECG,” it pointed out.
The letter says the PURC’s order imposing regulatory charges on the members of the board is unlawful, null and void as same is without jurisdiction.
“By this Order, the Commission has unlawfully clothed itself with the powers of the High Court, and imposed a sentence on the Board Members, without having been given the opportunity to be heard, which amounts to a breach of the rules of natural justice.”
The letter went on to state that the Commission does not have the power/authority to purport to impose any regulatory charge on officers of the public utility company.
“The Commission in purporting to impose the said regulatory charges on the Board Members of ECG clearly exceeded their jurisdiction as it is not within their powers/authority to do so,” it stressed.
“It must also be stated that the Electricity Company of Ghana Limited as a corporate body has a legal personality that is distinct from its Board Members. This is the very foundation of Company Law. The officers of the company cannot be held liable for the acts of the company.
“Lifting the veil of incorporation to go after the officers of the company can only be done in exceptional cases and can only done by a court of competent jurisdiction. The Commission’s lack of jurisdiction, power and/or authority to lift the veil of incorporation in the instant matter to purport to impose regulatory charges personally on the Board Members of ECG is strengthened by the provisions of Sections 38 & 42 of the Public Utilities Regulatory Commission Act, Act 538, 1997,” the letter averred.
The letter added that the board members “reject the contents of the regulatory order relative to any personal liability on their part.”
BY Gibril Abdul Razak