KE files case against ex-board member

Claims Rs5b in damages for ‘malicious campaign’

KARACHI:

K-Electric (KE) has filed a lawsuit against a former member of the company’s board of directors.

In a notice to the Securities and Exchange Commission of Pakistan (SECP) and the Pakistan Stock Exchange, KE said that it had filed a suit in the Sindh High Court against Asad Ali Shah, its former board member and a chartered accountant, and claimed Rs5 billion in damages for a “malicious campaign”.

According to KE’s petition, a campaign to malign their reputation was initiated by Shah, who served on KE’s board from February 2020 to July 2022, two weeks ago by publicly circulating a letter addressed to the chief executive of Pakistan Stock Exchange.

In relation to the allegation of treatment of bad debts as receivables from the government of Pakistan in the form of tariff differential subsidy, the company submitted that National Electric Power Regulatory Authority (Nepra)’s decision on tariff “considers that actual write-off against private sales is the genuine cost of petitioner’s business”.

Therefore, “the write-offs were recognised as a genuine cost of the plaintiff’s business. Furthermore, these claims were governed through the Multi-Year Tariff (MYT), which are a matter of public record.”

It said that for the purpose of actual write-offs in future, KE will complete the following procedures:

The defaulter to be written off shall be disconnected. The amount of write-off shall be approved by the KE board, which shall certify that KE has made all possible efforts to recover the amount being written off.

KE auditors shall verify that the amount is non-recoverable notwithstanding the efforts of the company. The terms of write off-shall also be given in detail.

In case any written-off amount is subsequently recovered from the customer, the recovered amount shall be adjusted in next year’s tariff.