The Electricity Company of Ghana’s (ECG) governing board has strongly objected to fines imposed by the Public Utilities Regulatory Commission (PURC) over the company’s failure to provide a load-shedding timetable.
PURC imposed a hefty fine of GH¢5,868,000 on board members serving from the start of the year until March 18, 2024, citing a breach of Regulation 39 of L.I. 2413 that mandates advance notice to consumers for power supply interruptions.
It defended the fine, citing the board’s responsibility for providing strategic direction to ensure service quality.
However, in a letter sent to PURC on April 17, legal representatives for the board, S.K. Boafo & Co, argued that the Commission lacked the equivalent powers of the High Court to levy fines.
The board members, the lawyers pointed out, are not directly involved in day-to-day operations and should not bear personal liability for management decisions.
The letter highlighted the board’s refusal to accept personal responsibility for operational decisions, stating that the Commission’s Order imposing regulatory charges is unlawful and without jurisdiction.
It also noted that fines were imposed without giving the board an opportunity to present their case, violating principles of natural justice.
“The Commission’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 the natural justice.
“Our clients, therefore, reject the contents of the regulatory order relative to any personal liability on their part,” excerpts of the letter stated.
PURC’s mandate
Lawyers for the ECG Board members emphasised that the PURC can only impose regulatory charges on a public utility, not its officers.
According to them, holding board members personally liable exceeds the Commission’s jurisdiction, as outlined in relevant sections of The Public Utilities Regulatory Commission Act, Act 538, 1997.
“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/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 is not within their powers/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 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 Commission’s 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
“As stated above, 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. 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.
“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.
“The Commission’s Order imposing regulatory charges on the members of the Boards 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. Our clients, therefore, reject the contents of the regulatory order relative to any personal liability on their part,” the lawyers concluded.
