By Telecom Lead Team: Econet Wireless is seeking $3.1
billion in damages from mobile service provider Airtel in a dispute over
ownership of its subsidiary Airtel Nigeria.
Responding to
the development Airtel said on Thursday: Bharti Airtel has been informed
that contrary to the Reuters report of Feb 22, 2012 (Econet seeks $3.1 bln
damages from Bharti Airtel), there is NO SUIT filed by Econet Wireless in any
court claiming $3.1 billion or any such or other sum.”
EWL has in a reply in one
proceeding stated that as presently advised by its financial consultants, the
claim for damages and equitable compensation might be in excess of $3 billion
bearing in mind that Celtel paid over $1 billion to acquire ANL and then sold
ANL to Bharti Airtel for $4.5 billion. EWL knows these are completely spurious
and misleading statements and bear no reference to reality.
EWL has provided no basis or
justification for this preposterous claim nor, as we believe, can it ever
provide any justification or basis for any claim whatsoever,” Airtel said.
According to media reports, Econet Wireless is disputing Airtel’s ownership of one of
its Africa operations. Econet disputed the buyout of Airtel’s stake from Zain
Nigeria in 2010 because its right of first refusal over the stake was denied,
in a dispute that had been ongoing since 2003, when the same assets were first
sold to Vee Networks.
Court asks Airtel Nigeria to reinstate shareholding of Econet Wireless
According to the judgment, Econet Wireless of
the United Kingdom is a shareholder of Bharti Airtel Nigeria and holds 5
percent of the issued shares of the company. The court ordered Airtel to
reinstate the shareholding of EWL.
The court ordered that all 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 court also ordered that the name change from Econet Wireless
Nigeria, effected in 2003, was irregular, and must be reversed forthwith.
According to a media report, the claim for damages and
equitable compensation against the applicant and some of the respondents might
be in excess of $3 billion.
The estimated damages might also be in addition to a
claim for $100 million received by the Applicant as fees for the management of
Vee Networks, a former name of Airtel, for a period of 6 years which sum should
have accrued.
The basis of Econet’s claim is that its 5 percent stake
was unfairly cancelled when Zain took control, so any decision made since then
without it, including the transfer to Bharti, is void. The Nigerian court
upheld that claim.
Nigeria contributes about 9.5 percent to Bharti’s
consolidated operational profits.
Bharti said last month that its stake in its Nigerian
unit was “completely safe” and that the world’s fifth-biggest mobile
phone carrier by subscribers had appealed against the verdict.
