Sequel to a recent Federal High Court judgment ordering Airtel to reinstate the shareholding of Econet Wireless Limited (EWL) in the company, the United Kingdom-based telecoms firms has today demanded the immediate enforcement of the ruling.
Econet Wireless Group Chairman, Strive Masiyiwa, said in a statement made available to Premium Times from Johannesburg, South Africa that EWL has already written to Airtel management through its lawyers to immediately reinstate and reissue its 5 percent equity interest in the company.
Last Tuesday, Justice Shuaib, delivered judgment in the suit No FHC/KD/39/2008 (Formerly FHC/L/172/2004) between Econet Wireless Ltd vs. Bharti Airtel Nigeria Limited, declaring that EWL holds 5 per cent of the issued shares as a shareholder of Bharti Airtel Nigeria Limited.
Consequently, Mr. Shuaib declared null and void all actions and resolutions taken by Bharti Airtel Nigeria Limited since October 2003, including decisions to sell shares, issue shares, as well as the transfer of shares to third parties. EWL was entitled to be notified and to participate in these transactions as a shareholder, but was prohibited.
In addition, the court ordered the immediate reversal of the name change from Econet Wireless Nigeria Limited in 2003, declaring it irregular. It also directed the Corporate Affairs Commission (CAC) to cancel any certificate previously issued for the name change and restore the name of the company to Econet Wireless Nigeria Limited.
According to Mr. Masiyiwa, EWL has also asked Bharti Airtel to ensure that it is provided 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 court.
He said 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.
“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,” Mr. Masiyiwa said.
In October 2003, Econet Wireless Ltd received a letter from the Chairman of the company, Oba Otudeko, in which he advised that at a board meeting, directors had decided that Econet Wireless was no longer a shareholder, and that Econet’s share certificate had been cancelled, and Econet’s name removed from the shareholder register.
Pointing out that the motive for the board’s action was to breach Econet Wireless’ rights as a shareholder in order to facilitate the sale of shares, first to Celtel International, and later to Bharti Airtel, Mr. Masiyiwa said that it had to seek redress a court in 2003 to enforce its rights.
He noted that for more than eight years the defendants had, through their lawyers, deployed all legal tactics to delay the process in order to frustrate Econet Wireless. He also expressed disappointment in the role of Celtel, Zain and Bharti-Airtel in the matter, particular when they were aware that Econet Wireless was a shareholder in the company.
“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 Group Chairman of EWL said.
“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.”
While warning that Econet would take any legal steps necessary to ensure full compliance with the ruling of the court with minimal disruption to the ongoing operations of the company, Mr. Masiyiwa said he and the board remain to dialogue with Bharti-Airtel, to review the best way forward for all parties.
“We have a fiduciary responsibility to take all of the necessary steps to vigorously protect the interests of our shareholders,” he said.
A reaction by Bharti-Airtel management to the court ruling was still being expected as at the time of going to press.