Airtel Appeals Ruling on Econet Wireless

Airtel Networks Limited has filed an appeal against the Federal High Court ruling which ordered it to restore the interest of Econet Wireless Limited (EWL) in the company.

In a statement made available to THISDAY yesterday, the company said: “In the light of the judgment by the Federal High Court of Nigeria regarding Econet Wireless Limited’s (EWL) claim to the ownership of five per cent 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, the statement said.”

The Federal High Court ruling, had on the January 24 said Econet Wireless Limited, an international company, domiciled in the United Kingdom, is a shareholder of Bharti Airtel Nigeria Limited and holds five per cent of the issued shares of the company.
The ruling had as a matter of urgency, ordered for the immediate re-instatement and reissue of the five per cent equity interest to EWL.

According to a  statement on the EWL Website, the judgment was handed down by Honorable Justice Shuaib, in the suit No FHC/KD/39/2008 (Formerly FHC/L/172/2004) between Econet Wireless Limited (EWL) vs. Bharti Airtel Nigeria Limited.

The summary of the judgment is that Econet Wireless Limited, an international company, domiciled in the United Kingdom, is a shareholder of Bharti Airtel Nigeria Limited and holds five per cent of the issued shares of the company; and Airtel Limited should therefore to reinstate the shareholding of EWL.

The court further declared all actions, and resolutions, including the decisions to sell shares, issue shares, and also transfer shares to third parties 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.

The court also ordered that the name change from Econet Wireless Nigeria Limited, effected in 2003, was irregular, and must be reversed forthwith, while the Corporate Affairs Commission (CAC), must 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.

The Econet Group Chairman, Mr. Strive Masiyiwa, while commenting on the High court’s decision, stated that Econet Wireless was left with no option but to seek redress through the courts, thus an application was filed in the Nigerian Federal High Court more than eight years ago, precisely in October 2003.

“In October 2003, Econet Wireless Limited received a letter from the chairman of the company, Mr. Oba Otudeko, in which he advised that a meeting of 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.

Masiyiwa said the defendants, delayed every legal avenue through their lawyers, in order to frustrate Econet Wireless during the case.

According to Masiyiwa, “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, “he said.

Masiyiwa however, assured that as a shareholder, all actions that will be taken to comply with the court order will be undertaken in such a way that there is minimal disruption to the ongoing operations of the company.

“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.”

According to Masiyiwa, EWL has however, asked Bharti Airtel to ensure that it is provids full access to informations relating particularly to board decisions and shareholder resolutions in accordance with the Companies Act, the shareholders agreement between the parties, and in pursuance of the orders of the court.

“The board of Econet Wireless and I remain willing to sit down with Bharti-Airtel, to review the best way forward for all parties, while we take all the necessary steps to vigorously protect the interests of our shareholders,” he said.

By Emma Okonji and Amaka Eze