Court Orders Airtel Nigeria to Reverse Name to Econet Wireless

On
the 24th January 2012, in the Federal High
Court of Nigeria, the Honorable Justice
Shuaib, handed down judgment in the
matter between Econet Wireless Ltd ('EWL')
vs. Bharti Airtel Nigeria Limited, suit No FHC/
KD/39/2008 (Formerly FHC/L/172/2004).
The summary of the judgment is as follows:
-- Econet Wireless Ltd, an international
company, domiciled in the United Kingdom,
is a shareholder of Bharti Airtel Nigeria
Limited and holds 5% 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
Limited, effected in 2003, was irregular, and
must be reversed forthwith.
-- The Corporate Affairs Commission (CAC)
has been ordered 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.
As a result of the judgment by the Honorable
Justice Shuaib, Econet Wireless Limited
through its lawyers has now written to the
company, with the following requests:
-- Immediately reissue shares in the
company to Econet to reinstate its 5%
interest.
-- Provide Econet full access to information
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 Federal High
Court of Nigeria.
Econet Wireless intends to review the
decisions taken by the board and other
shareholders to ascertain which actions are
in violation of the order of the High Court.
Commenting on the decision, Econet
Wireless Group Chairman - Mr 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.
"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.
"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." Source:
www.econetwireless.com.
Meanwhile, Airtel mid Monday in an emailed
statement to THEWILL after our earlier
publication said it would appeal the
judgement.
“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."
http://thewillnigeria.com/business/12162-
Update-Panic-Airtel-Court-Orders-Company-
Reverse-Name-Econet-Wireless.html