ISLAMABAD: K-Electric (KE) has called out former director Asad Ali Shah’s recent statement through a letter as “concocted and framed to damage the reputation of KE” and informed the Pakistan Stock Exchange (PSX) that a legal action had been initiated against Shah for authoring the letter.
The disclosure also cited a court petition, a copy of which has been received by the publication and which appears to contain a detailed response to each of the alleged “material misstatements” which Shah, son of former CM Sindh, called out.
As per Shah’s claims, the power company was guilty of irregularities and was violating certain accounting standards.
However, according to KE, such communication "bends facts and hides key information causing damage and appears to be a deliberate, mala fide attempt to lower the company’s reputation in the eyes of the public."
KE cited a 2017 decision of NEPRA on KE’s Multiyear Tariff wherein it is clarified that the incorrect allegations of writing off bad debt as receivables from the Government of Pakistan have no basis.
According to the utility company, the accountant twisted the fact that under NEPRA’s decision of 20.03.2017, write-offs against private sales were genuine costs of the power utility’s business and subsequently issued conditions via NEPRA’s S.R.O 576(1)/2019.
Under those guidelines, it added, a policy was designed where an accounting principle is applied: revenue is recorded when due rather than when it is received, and receivables recorded and claimed in the books according to regulation.
It further stated that material misstatements made in the company’s financial records were worthy of dismissal since shareholders and stakeholders were informed of its unconsolidated financial statements and respective notes attached mentioning that the matter was under deliberation with NEPRA and had been part of public hearings regarding the electric company’s tariff.
The petition also tackles an accusation that KE was rampantly recording revenue against all theft of electricity, identifying that that was based on “complete misunderstanding and omission of any distinction between registered (temporary) hook connections.”
Sanctioned or registered hook connections were fixed for street vendors who did not have permanent workspaces and unregistered ones were theft and not recognised as revenue by the power company, it added.
The suit also claimed that Shah’s accusations were ill-informed and violated the confidentiality clause which still applied to him. It was also noted that the proper process was not followed to share grievances, especially as Shah has also been a member of the SECP’s policy board.
KE said the decision to go public with the information despite being aware of the rules and regulations was “alarming and demonstrates unbecoming behavior, liable for disqualification from directorship of any board.”
Latest information with the paper shows that Asad Ali Shah and K-Electric’s legal representatives are scheduled for a court hearing on February 7.