The board has ultimate responsibility – Kwabena Donkor backs PURC’s decision to sanction ECG directors

Former Minister of Power, Dr Kwabena Donkor, has justified the decision by the Public Utilities Regulatory Commission (PURC) to sanction the board of directors of the Electricity Company of Ghana (ECG) in addition to the ECG itself as a company.

Dr. Donkor explained that per the corporate governance structure, the board has ultimate responsibility for all the decisions of the company hence it was in the right direction that they were attached to the sanction by PURC.

Speaking on the Ghana Tonight show on TV3 on Tuesday, April 16, the Pru lawmaker said “Let us not forget ECG is a limited liability company and Act 992 of the Companies Act, provides for what we term removing the veil, providing for attacking directors personally for some categories of offenses.

“For me, this is so important and I believe it is a groundbreaker, I happen to be also a ranking member on the committee for state enterprises and we have had a regime where directors do not take their responsibilities seriously.

“Indeed, some directors never even attended board meetings, and yet if you look at the corporate governance structure the board has ultimate responsibility for all the decisions of the company. Therefore, for me, it is a step in the right direction.”

He however noted that the board of directors can appeal the decision of the PURC to PURCnistkef or go to court.

He said “even though the quantum of the sanction on directors, I will encourage them to appeal. Under the PURC Act, you can always appeal the decision of the PURC to PURC itself and of course, the constitutional provision that allows you to go to court when you have such quasi-judicial decisions. But it is a very good step in the right direction.”

The PURC has given a six-week ultimatum to the Board Members of the Electricity Company of Ghana (ECG) to pay a fine of Five Million, Eight Hundred and Sixty-Eight Thousand Ghana Cedis (GHS5, 868,000.00).

The fine was imposed as result of the ECG’s failure to notify its customers about power outages between January and March this year.

This is contained in an order statement issued 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).

“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 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 regulatory body ordered.

It would be recalled that in March 2024, the PURC warned that it would be compelled to issue regulatory sanctions against the power distribution company.

This came after the regulatory body observed that the ECG had failed to comply with its directive to release a load-shedding timetable corresponding with the timelines and duration for each transformer injection.

The regulator said it had not seen any evidence of the publication of the load management timetable despite being ordered to do so. In that regard, the Commission said it “is finalizing regulatory action on the above.” Thus, the fine imposed on the Board members.

The ECG has been facing public backlash due to the prevailing erratic power supply situation in the country, locally known as ‘Dumsor’. While it lays the blame at the doorstep of the Ghana Grid Company (GRIDCo), the latter also points to ECG for not complying with notices given to it.

Amid this blame game, the Board Chairman of the ECG, Mr Keli Gadzekpo resigned for “personal reasons.”