FRESH TUSSLE LOOMS OVER EQUITY AT 0802
By adekunle adekoya, with agency reports
…As court judgment reinstates Econet's equity.
A FRESH tussle over equity at Airtel Networks, before the courts since 2003 may now shift to the boardroom as a result of a judgment by the Federal High Court sitting in Kaduna, presided over by Justice Shuaib in the matter of equity claim of five per cent by Econet Wireless Ltd in Airtel Networks Ltd.
But the telecoms operator has said that it has filed an appeal against the judgment, while reiterating that said judgment will have no impact on the holdings of other shareholders in Airtel Nigeria.
Six days ago on January 24, Justice Shuaib delivered his judgement on a matter which has been before the courts since 2003, and ordered that:
Airtel should reinstate the five per cent (5%) shareholding of Econet Wireless Ltd (EWL);lAll actions, and resolutions taken by the company since October 2003, at which EWL was entitled to be notified, and to participate in, as a shareholder, but was prohibited, are null and void. This includes decisions to sell shares, issue shares, and also transfer shares to third parties.
The name change from Econet Wireless Nigeria Limited, effected in 2003, was irregular, and must be reversed forthwith.
Justice Shuaib further ordered the Corporate Affairs Commission (CAC), to cancel any certificate previously issued for the change of the name of the company and restore the name of the company to Econet Wireless Nigeria Limited.
But in a statement posted on Econet Wireless International's portal, dated January 30, Strive Masiyiwa, Econet's supremo said: 'It is universally accepted throughout the world, that when shares in a company are allotted and share certificates issued, as confirmation of ownership, this is sacrosanct.
Executive Vice-Chairman of NCC, Dr. Eugene Juwah
'In October 2003, Econet Wireless Ltd received a letter from the chairman of the company - Mr Oba Otudeko, in which he advised that at a board meeting directors had decided that Econet Wireless was no longer a shareholder, Econet's share certificate had been cancelled, and Econet's name removed from the shareholder register. The motive for this unprecedented action was the circumvention of Econet Wireless' rights as a shareholder in order to facilitate the sale of shares, first to Celtel International, and later to Bharti Airtel.
'As a result of these actions, Econet Wireless was left with no option but to seek redress through the courts. An application was filed in the Nigerian Federal High Court in October 2003, more than eight years ago. Since then, every legal avenue to delay the process was pursued by the defendants through their lawyers, in order to frustrate Econet Wireless.
'I am very disappointed that whilst it was clear to Celtel, Zain and Bharti Airtel that Econet Wireless was a shareholder, they still chose to pursue a path, in which the end justified the means. It is clear even to those with the most basic understanding of company law that the board of a company has no power in any jurisdiction to simply cancel the shares of a shareholder but their desire to own the company was so great that they were prepared to overlook the facts and ignore our rights.
'The substance of this ruling, which was known by Celtel and then Bharti, was a matter of record in the legal documents of the company. It is also common cause to even the casual reader that the order given has far-reaching consequences on the current ownership status of the company.
We have made it clear to the company, that as a shareholder, we would like to ensure that all actions that must be taken to comply with the court order are undertaken in such a way that there is minimal disruption to the ongoing operations of the company.'
While opting to appeal the judgment, in a statement issued by Emmanuel Otokhine, the telco's Head of Public Relations, the management of Airtel Nigeria said.
Claim to the ownership
'In the light of the judgment by the Federal High Court of Nigeria regarding Econet Wireless Limited's (EWL) claim to the ownership of 5% equity in Airtel Networks Limited (Airtel Nigeria), an appeal against the said judgment has been filed by Airtel Nigeria. The company abides by and has full confidence in the law of the land, and believes the Appeal Court will determine the appeal on its merits.
'In addition, the judgment will have no impact on the equity holding of other shareholders in Airtel Nigeria.
'We wish to assure our customers, employees and business partners that the ruling will in no way affect operations or the company's ability to fulfill obligations to its stakeholders.'
But it would seem that both parties will have to come to the negotiating table at the end of the day to marshall options for the future. This much is evident in the position taken by Masiyiwa in the statement posted on Econet's website.
'The board of Econet Wireless and I remain willing to sit down with Bharti Airtel, to review the best way forward for all parties. In the meantime, we have a fiduciary responsibility to take all of the necessary steps to vigorously protect the interests of our shareholders.'