Asad Ali Shah, a former director, recently made a declaration through a letter that was "concocted and fabricated to tarnish the reputation of KE," according to a statement from K-Electric (KE), which informed the Pakistan Stock Exchange (PSX) that legal action had been taken against him.

The revelation also highlighted a court plea, a copy of which The News has seen, that appears to contain a thorough denial of each of the purported "material misstatements" made by Shah, the son of the former Sindh chief minister.

Shah alleged that the power firm had engaged in errors and had broken key accounting rules.

In order to demonstrate that the false claims of writing off bad debt as receivables from the Government of Pakistan are unfounded, KE highlighted a 2017 judgement of NEPRA on KE's Multiyear Tariff.

The utility company alleges that the accountant misrepresented the fact that write-offs against private sales were legitimate costs of the power utility's operations under NEPRA's judgement of 20.03.2017 and subsequently issued conditions via NEPRA's S.R.O. 576(1)/2019.

In accordance with those rules, it was further stated, a policy was created where an accounting principle was applied: revenue is recorded when it is due rather than when it is received, and receivables are documented and claimed in the books in accordance with legislation.

It went on to say that since shareholders and other interested parties were informed of the company's unconsolidated financial statements and the notes that accompanied them, as well as the fact that the matter was being discussed with NEPRA and had been raised in public hearings about the electric company's tariff, material inaccuracies in its financial records were grounds for dismissal.

In addition, the petition addresses the claim that KE was blatantly recording revenue against all electricity theft, pointing out that this claim was based on a "total misunderstanding and omission of any distinction between registered (temporary) hook connections."

According to the statement, unregistered hook connections were theft and were not recognised as revenue by the power provider. In contrast, sanctioned or registered hook connections were fixed for street vendors who did not have permanent workspaces.

Shah was accused of making unfounded claims and breaking the confidentiality agreement, which still applied to him, according to the lawsuit. It was also highlighted that the necessary procedure for sharing complaints was not followed, particularly given that Shah has also served as a member of the SECP's policy board.

KE criticised the decision as "alarming and indicates unseemly behaviour, liable for disqualification from directorship of any board" despite knowing the laws and regulations.

According to The News' most recent information, a court hearing for Asad Ali Shah and K-attorneys Electric's is set on February 7.