You don’t have power to fine board of directors – Lawyer to PURC

A private legal practitioner and energy analyst, Richmond Rockson, has stated that the Public Utilities Regulatory Commission (PURC) does not have the authority to fine the board of directors of the Electricity Company of Ghana (ECG).

He maintained that the sanction should rather be imposed on the company, not the directors.

The PURC sanctioned the board of ECG with a fine of GHS5.8 million, due on May 30, 2024, for “failing to comply with the 3-day statutory notice on planned outages.”

But Richmond Rockson, in an interview on TV3’s News360 on Tuesday, April 16, underscored that under the PURC Act, 1997 (Act 538) and regulation (241)(3), “the sanctions go to the utility body.”

“I don’t believe the PURC on its own can go beyond the utility body,” he said, adding that “as a utility body, once an act has been done by the company and they are liable, you sanction the company and you’re expecting that the company should be able to pay for it.

He further explained the role of directors, saying, “According to the Company’s Act,2019 (Act 992) directors owe fiduciary duties to companies,” explaining that, “if the company comes to realisation that a director did not act fairly and that had led to a loss or any amount, the company will take steps to recover any loss.”

This, he said, is due to “the action or inaction” of the said director, which resulted in such losses.

However, Richmond Rockson commended the PURC for taking such a bold step to fine a public institution like the ECG.

“I believe that the PURC has the mandate to regulate the public utilities, it has the right to sanction ECG as it has done, but I don’t believe that it should have gone to the directors personally.”

Meanwhile, there are concerns that if the fine goes to the ECG, the company may pass it over to customers to pay, thus the decision to fine the directors.

This formed the basis of PURC’s decision to fine the 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.

“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 regulator stated.

Source: Myrepubliconline