Econet sues Herald For US$2 Billion

Herald Business published an article, which gave an account of what happened at the company’s extraordinary general meeting held last week on Friday.

The article among other issues disclosed how Econet directors attempted to disenfranchise Old Mutual through poll irregularities.

The company’s lawyer Beatrice Mtetwa of Mtetwa and Nyambirai said as a result of damages, following payments needed to be effected to Econet (US$1 billion), its chairman Mr Tawanda Nyambirai, (US$250 million) and each of their current directors (US$100 million).

The money being demanded by Econet and its directors is almost equal to the combines average value of 79 Zimbabwe Stock Exchange trading shares.

Econet’s market value is around US$75,5 million. Its instalment sale agreement with Econet Wireless Global, the centre of controversy is just below US$40 million.

It is also way above the country’s 2009 national budget and above the US$1 billion Zimbabwe urgently needs to start rebuilding the economy.

In the story, Herald Business also revealed how its auditors attempted to inflate the ballots, disregarded Old Mutual proxies, boosted voting numbers in favour of the resolutions and reduced those voting against.

"We are instructed to the demand, as we hereby do, that you pay these damages on or before the 9th April, 2009 failing which we have instructions to issue summons against you," said Ms Mtetwa.

She added that the article was calculated to convey that Econet, its chairman and directors have acted in an unlawful fraudulent manner.

Herald Business broke the story on Tuesday of the irregularities during the meeting that also sucked in Deloitte and Touche.

"The article complained of, is defamatory to Econet as a company and the article has severely injured its reputation as a business.

"In addition, the false and defamatory statements in the article were calculated to cause Econet financial prejudice within and without Zimbabwe.

"The defamatory and false statements published of Mr Nyambirai and other directors have injured their dignity and reputation in that they have been characterised as fraudulent cheats who were involved in vote rigging, that they are not law abiding citizens, that they have no right of others, and that they are generally unfit to hold the positions that they do," read part of the letter.