A major labour crisis is unfolding at the Abuja Electricity Distribution Company over an alleged fraudulent allocation of outrageous salaries and perks to a few officials.
While a privileged few draw as high as N36 million a month from the public liability company that is operating on deficit, majority of equally qualified and even more critical staff absorbed from the previous government-owned Power Holding Company of Nigeria, PHCN, receive peanut, PREMIUM TIMES has found.
After the privatisation of PHCN, the Nigerian government retained substantial stake in the distribution companies, including the Abuja DISCO.
This means the government is entitled to part of the profit. But this must happen only after operation cost of the company, comprising of overhead and personnel cost, are deducted.
For the past two years, the company recorded only losses instead, but at the same time paid outrageous salaries to a select few.
The chairperson of the board takes home N36 million a month, while a staff with Ordinary National Diploma, OND, takes home as high as N1.9 million monthly.
While this select few rip the firm off, majority of the key staff retained from PHCN are paid between N50, 000 to N150, 000.
According to the company’s financial statement prepared by KPMG as at December 31, 2014, the Abuja Electricity Distribution Company’s revenue increased from N36.01 billion in 2013 to N48.1 billion.
Yet, the company declared a higher loss of N25.61 billion in 2014, up from N13.37 billion in 2013.
Notwithstanding the loss, the company’s administrative expenditure nearly doubled – from N13.67 billion in 2013 to N24.93 billion in 2014.
The board chairman, Siyanga Malumo, who received N5.67 million as salary monthly in 2013, had his pay reviewed by over 640.7 percent, to N36.33million, according to the report obtained by PREMIUM TIMES.
Six directors who received between N3.5million and N4million a month in 2013 also got a raise to between N145 million and N150 million annual pay.
Within the year, N719.7million was also spent on “salaries and other short-term benefits to key management personnel compensation”.
Whiff of fraud
After the privatization of PHCN, about 3,601 former workers of the defunct company were re-engaged on November 1, 2013, by the new firm. The workers were retained mostly as casual staff.
The Abuja distribution company recruited another set of employees in 2014, either as permanent or contract staff.
Although the company’s approved salary structure obtained by PREMIUM TIMES ranged between N47, 186.80 for the least paid staff on grade level JS1 step 1, and N1.137.069.17 for the highest paid official on grade level EG1, some categories of staff received far ahead of those allocations.
The payroll reflects a huge disparity in favour of the new employees.
Although most of the new employees lack technical competence and practical experience, they were made to pocket between N1.2 million and N1.9 million per month, PREMIUM TIMES found.
Their colleagues from PHCN receive between N50, 000 and N200, 000 per month, irrespective of qualification and experience.
Only a few of the older workers earn N200, 000 and above.
The huge disparity in salary between the different categories of workers is fuelling discontent in the company.
Public or private firm?
Abuja Electricity Distribution Company is one of the 11 successor power distribution companies (DISCOs) of PHCN.
It was created to undertake electricity distribution activities and related business in Niger, Kogi and Nasarawa states and the Federal Capital Territory.
The company is owned 60 percent by KANN Utility Company Limited, a joint venture between Xerxes Global Investment Ltd, CEC Africa Investment Ltd and Abuja Electricity Distribution Plc.
The Nigerian Government still controls 40 percent of the company through the Bureau of Public Enterprises, which has 32 percent, and the Ministry of Finance which owns eight percent.
Prior to the power sector privatization exercise, BPE had disengaged over 4,000 former PHCN employees on October 31, 2013, as part of the winding down process.
The Nigerian Electricity Regulatory Commission, the electricity sector regulatory agency, said AEDC was later allowed to re-engage about 3,601 of the workers for an initial contract period of six months.
Details of the company’s financial statement showed that at the completion of the re-engagement process, 3,658 workers were on the company’s payroll in 2013, consisting Administration (845), Finance (399), Marketing (1,116) and Technical (1,298).
The figure, however, fell to about 2,243 in 2014, with Administration having 320, Finance (279), Marketing (859) and Technical (785).
At the expiration of the initial contract period in 2014, NERC explained that each worker was issued fresh re-engagement letters as permanent or contract staff, in line with the AEDC’s framework of employee remuneration and public service rules.
There were yet a lot of others designated casual workers.
“Apart from discriminatory salaries, the casual workers are denied vacation and proper medical attention, despite performing similar jobs and exposed to same hazardous conditions at work on a daily basis,” one of the affected workers said. He did not wish to be identified for fear of victimization.
Consulting house of fraud
Investigations by PREMIUM TIMES uncovered monumental fraud in the company’s payroll traceable to an agency, TBS Consulting, hired to handle staff recruitment in 2014.
For instance, Yusuf Mosunmola, one of the directors and a key member of the TBS Consulting management team, doubles as Head, Organisational Development & Learning for AEDC.
As director of the consulting firm, Ms. Mosunmola was in charge of the entire recruitment process for all categories of employees in AEDC.
The Executive Director, Corporate Planning & Business Development, Omokhoa Okaisabor, told PREMIUM TIMES that Ms. Mosunmola was hired to help in resolving the human resources issue the company had at inception.
After the privatisation exercise, AEDC was confronted with human resources issues that bordered on lack of proper training for staff and a lot of skill gaps, he said.
Mr. Okaisabor said the company had resolved that if no one was found within the company to handle the human resource function, it should be outsourced to a contracting firm, to bring the required staff to manage the key HR function on contract basis.
“That was how TBS Consulting was hired, with Ms. Mosunmola as one of directors, to recruit the staff on contract basis,” Mr. Okaisabor explained.
A source close to AEDC headquarters said a part of the about N285.5million in the 2014 financial statement spent as consultancy fees for technical support services by KANN Utility Company Limited was by TBS Consulting for extensive services on IT, procurement, integration, support and turnaround strategies in 2013.
The director explained to PREMIUM TIMES that all the contract staff recruited by TBS Consulting for AEDC had “special arrangements” with Ms. Mosunmola on how the salary penned against their names would be split.
“Not all the salary actually gets into their (contract staff’s) pockets,” Mr. Okaisabor explained. “The contracting firm has some personal arrangement to get part of the money paid to them as salaries by the company. The practice is that the contracting firm gets the money from the company and pays the staff.”
“Most of the names found on the company’s payroll are either non-existent or belong to persons who work directly for Madam’s (Mosunmola) other companies,” one of the staff familiar with the issue said on Friday.
The staff said the special arrangement must have been in connection with allegations that at least 60 percent of the salaries credited to most of the high earners on the company’s payroll every month goes to Ms. Mosunmola, who also has interests in other companies providing various services for AEDC, like cleaning.
While AEDC pays millions to Ms. Mosunmola’s company for such services, she is said to be paying peanuts to the workers and pocketing the balance.
Some of the names on the AEDC payroll that raised eyebrows were those of two contract staff hired in 2014 and posted to the Lokoja District office.
They include Akanku Olusegun, a National Diploma holder in Electrical, and Higher National Diploma (HND) (in view), who is paid N823, 764 per month.
The same goes for Adesulu Adebayo, another National Diploma holder in Electrical holder in the same office, who takes home N764, 097.60 salary every month.
Curiously, several of their colleagues in various district offices with either similar qualifications or superior university degrees of many years’ standing, are paid a paltry N50, 000.
Ms. Mosunmola on her part remains one of the highest paid officials, who pockets a whopping N1.84 million pay every month. This is in additional to the N27million and another N10 million paid to her as furniture allowance and accommodation respectively.
Also Ms. Mosunmola grapples with the obvious challenge of conflict of interests as she appears to work for AEDC and TBS Consulting simultaneously.
“It’s a clear case of fraud inspired by greed,” Alfred Ituah, an Abuja-based legal practitioner told PREMIUM TIMES on Friday.
“It is practically impossible for her (Mosunmola) to expect that she would effectively joggle both jobs of recruiting workers for AEDC and be on the company’s staff payroll in whatever capacity without getting entangled in the mess of conflict of interest,” he noted.
ICPC wades in
In August, some top AEDC officials were invited by the Independent Corrupt Practices and Other Related Offences Commission for questioning following a petition by some aggrieved workers.
Those invited included the Managing Director; Executive Director, Human Resources; Head of Finance/Financial Controller and Principal Manager in charge of Procurement.
The ICPC’s invitation letter had asked the affected AEDC top officials to provide for examination the statute/law/enabling Act establishing the company; the company’s nominal roll since 2013, and certificate of compliance in recruitment process from the Federal Character Commission.
The officials were also asked to furnish the Commission with the company’s payroll for June 2015; company policy; list of contracts awarded from January 2013; statement of Account; statement of salary accounts as well as recruitment report detailing advertisements, short listings, result sheets/scores since 2013.
A top official of the Commission, who asked that his identity not be revealed, as he was not authorized to speak to the media on the issue, confirmed that the officials honoured the invitation on August 4, 2015.
Mr. Okaisabor who also confirmed the invitation of AEDC top officials by ICPC, said all issues raised by the Commission were resolved over two meetings, the last being in September.
The tension in the company appears to have worsened last week following another round of recruitment interviews held for Regional Managers, Area Managers, Billing Specialist and Support Officers as well as Project Managers.
The exercise was again handled by Ms. Mosunmola on behalf of TBS Consulting allegedly as part of plans by AEDC to downsize its workforce.
Mr. Okaisabor described as unacceptable the issue of conflict of interest concerning Ms. Mosunmola roles in AWEDC and TBS Consulting, saying if investigated and found to be true, she would be queried and sanctioned.
“I will have to crosscheck that information. But, it will be extremely careless and stupid of them (TBS Consulting) to outsource somebody to a company and the person is still on the company’s management staff. If that is the case, she has to be queried and sanctioned. It’s unacceptable,” Mr. Okaisabor said.
When the reporter contacted Ms. Mosunmola on telephone on Friday to confirm her connection with the two organisations, she refused to comment, insisting on knowing first what the information was for.
When told the reason, she immediately terminated the call. Subsequent calls to her phone were not answered. Equally, text messages to her phones were also not responded to.
However, in what a appeared an attempt to cover her tracks, TBS Consulting on Monday, October 12, edited its website and removed Ms. Mosunmola from the list of its management team.
See the site on Friday and the edited version below.