ECG Board challenges GHC 5.8m PURC fine

The board of the Electricity Company of Ghana (ECG) has registered its opposition to the fine levied by the Public Utilities Regulatory Commission (PURC) for regulatory breaches.

In a letter to the PURC dated April 17, 2024, lawyers for ECG, S. K. Boafo & Co., argued that the PURC’s legal mandate allows it to impose fines on the company itself as a public utility, not on its board members.

They explained that the board members are not directly involved in the day-to-day operations of the company and hence cannot be held liable for the company’s decisions.

“It is patently clear that under the said provision, the Commission can only impose a regulatory charge on a public utility. The Commission does not have the power or authority to purport to impose any regulatory charge on officers of the public utility. The Commission, in purporting to impose the said regulatory charges on the board members of ECG, clearly exceeded their jurisdiction as it was not within their powers or authority to do so.”

“It must also be stated that the Electricity Company of Ghana Limited, as a corporate body, has a legal personality that is distinct from that of 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,” the letter read in part.

The lawyers emphasised that PURC lacks the equivalent powers of the High Court to ‘lift the veil of incorporation’ in order to charge those fines. 

“Lifting the veil of incorporation to go after the officers of the company can only be done in exceptional cases and can only be done by a court of competent jurisdiction.”

“The Commission’s order imposing regulatory charges on the members of the board is unlawful, null, and void as the 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 lawyers also contested the procedures and process leading to the imposition of the fine as a violation of the principles of natural justice, as the board members were not given an opportunity to present their case.

“Our clients, therefore, reject the contents of the regulatory order relative to any personal liability on their part,” the letter concluded.

PURC imposed a charge of GHC 5,868,000 on ECG board members who served between January 1 and March 18, 2024, citing a breach of Regulation 39 of L.I. 2413, requiring a 3-day advance notice to consumers for power supply interruptions.

The Commission stated that imposing the penalty of GHC 5,868,000.00 on the company itself will be counterproductive due to its business nature and potential negative impact on service quality and tariff-paying consumers, hence the fine on the board members.