3rd February, 2012
The crisis in Bharti Airtel is far from being over as a Federal High Court has ordered the company to reinstate Econet Wireless’s 5 per cent stake in Bharti’s Nigerian operations.
Justice Shuaib of the Kano High Court, Kano State, 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)
Econet Wireless, an early investor in the company, had opposed former owner Zain’s decision to sell the Nigerian business to Bharti Airtel, claiming its right of first refusal.
But Zain went ahead to sell its African mobile business, including Nigeria, to Bharti in 2010 for $10.7 billion dollars.
According to the summary of the judgement delivered by Justice Shuaib, Econet is a shareholder of Bharti Airtel Nigeria Limited and holds five per cent of the issued shares of the company.
The Court, therefore, ordered that all actions and resolutions taken by the company, since October 2003, at which Econet was entitled to be notified, and to participate in, as a shareholder, but was prohibited, were null and void.
This, according to the court, includes decisions to sell shares, issue shares, and transfer shares to third parties.
The court also orederd the Corporate Affairs Commission to cancel any certificate previously issued for the company’s change of name of the company and restore its name to Econet Wireless Nigeria Limited.
A statement issued on behalf of Econet, stated that the firm through its lawyers has, as a result of the judgement, written to Bharti Airtel to immediately reissue its shares to Econet to reinstate its five per cent interest.
In its response to the judgment, Bharti said, “In 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 our operations or the company’s ability to fulfill obligations to its stakeholders.”
—Henry Ojelu