Econet wins its long battle in Nigeria

A NIGERIAN Federal High Court has reinstated Econet Wireless International (EWL)’s 5% shareholding in Bharti Airtel Nigeria Ltd after the Zimbabwe-incepted mobile phone operator challenged the legality of a board meeting that usurped its shareholding in the West African counterpart.

 

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EWL had been locked in legal battles in the Nigerian courts since 2003.

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The court ordered that EWL was still a shareholder of Bharti Airtel Nigeria Limited and held 5% of the issued shares of the company and ordered Airtel to reinstate the shareholding.

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The court also ordered that all actions and resolutions taken by the company were null and void. This included decisions to sell shares, issue shares, and also transfer shares to third parties. The court also ordered the name changes in 2003 to Bharti Airtel Nigeria Ltd,  from Econet Wireless Nigeria Limited, to be reversed since the change was irregular.

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As a result of the order,  Econet Wireless Limited’s lawyers have written to Airtel to immediately reissue shares in the company to Econet to reinstate its 5% interest and give the mobile phone operator full access to board decisions and shareholder resolutions.

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EWL said it intends to review the decisions taken by the board and other shareholders to ascertain which actions were in violation of the order of the High Court.

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Commenting on the ruling, Econet Wireless Group chairman Strive Masiyiwa 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.”

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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.

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Masiyiwa said Econet Wireless was left with no option but to seek redress through the courts.

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“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,” Masiyiwa added.

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Masiyiwa said he would ensure that all actions taken to ensure the West African company complies with the order would be undertaken in a manner that would not disrupt the company’s operations.

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“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,” said Masiyiwa.

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