KUALA LUMPUR (July 4): Tenaga Nasional Bhd (TNB) announced today that it is seeking a judicial review of the directions issued by the Energy Commission (EC) and the Minister of Energy, Green Technology and Water, in relation to a new power purchase agreement (PPA) that it is negotiating with YTL Power Generation Sdn Bhd.

TNB said its move was in relation to a direction dated April 7 that was issued by the EC to TNB, which compels TNB, among others, "to remove the incorporation of conditions precedent required by TNB" in the proposed new PPA with YTL Power.

"The direction was made pursuant to the minister's direction to ST (EC) on April 1, 2016," said TNB.

Via the judicial review, it is seeking a written order from the court to quash the EC's direction, as well as the minister's direction, and a declaration that both their directions were ultra vires, or beyond the issuer's legal power or authority, as provided under the Electricity Supply Act 1990 (ESA) and the Energy Commission Act 2001.

Failure to comply with the EC's direction is a punishable offence under Section 50E of the ESA, which could result in TNB being fined not more than RM200,000 or jailed for no more than two years, or both.

As such, TNB wants the EC's direction be stayed "pending the hearing and determination of the judicial review proceedings on its merits".

"Aside from legal and management costs, the judicial review proceedings will not have any material financial and operational impacts on TNB," said TNB, adding that it would make further announcements as and when there is any material development to the case.

TNB closed two sen higher today at RM14.06, for a market capitalisation of RM79.35 billion.