Airtel Nigeria Told To Reverse Name To Econet Wireless

This is really interesting times in the Nigerian telecoms sector as the Federal High Court of Nigeria thru the Honorable Justice Shuaib, has handed down judgment in the matter instituted by Econet Wireless Ltd ('EWL') against Bharti Airtel Nigeria Limited. The summary of the judgment states that Econet Wireless Ltd, an international company, domiciled in the United Kingdom, is a bonafide shareholder of Bharti Airtel Nigeria Limited and holds 5% of the issued shares of the company and therefore Airtel should reinstate the shareholding of EWL.

The Court went ahead to order 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.  This by extension also includes the multiple name changes the comapny had undergone as the Court also ordered that the name change from Econet Wireless Nigeria Limited, effected in 2003, was irregular, and must be reversed forthwith.

In line with that ruling, 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 requests to: Immediately reissue shares in the company to Econet to reinstate its 5% interest and 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 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."

Meanwhile, Airtel emailed a statement 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."