Thisday|| In what could be described as a setback, Bharti Airtel, one of the country’s largest mobile-phone operators, potentially faces US$3 billion in payouts over a five per cent stake claimed by Econet Wireless in its Nigerian unit.
The payout is as result of the of a judgment by the Lagos Division of the Court of Appeal which last week held that Econet Wireless remains a bona fide stakeholder in Airtel Nigeria, a unit of the Indian firm.
The court said Airtel failed to get the rulings of two lower courts quashed over attempts by Econet Wireless to reacquire its stake in the company.
But in a swift reaction to the judgment, Bharti said it will appeal the case at Supreme Court. “Bharti Airtel, a 79.06 per cent shareholder in Airtel Networks Ltd, Nigeria (Airtel Nigeria) is not satisfied with the judgment of the appellate court, and promised to lodge an appeal against the decision at the Supreme Court of Nigeria,” Airtel said in a statement yesterday. The Indian company said the disputed shares are in an escrow account and the judgment would have no impact on the stake of Bharti Airtel or other Airtel Nigeria shareholders. No comments were received from Econet.
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Airtel Nigeria is part of the African telecoms business that Bharti acquired from Zain for about USD 10.7 billion.
“Airtel Nigeria has already launched an appeal before the Supreme Court of Nigeria against the judgment of the Court of Appeal in Kaduna in the matter relating to Econet’s claim for 5 percent shares in Airtel Nigeria,” the statement said.
“We would like to unequivocally state that neither of these orders of the Courts of Appeals in Lagos and in Kaduna deal with the quantum of damages and no such quantum has been determined.” Nigeria is among Airtel’s top African markets, with a 30 percent share of revenue from the continent in 2012-13.
“Bharti Airtel and Airtel Nigeria have full confidence in the laws of the land, and believe the Supreme Court in Nigeria will determine the appeals on merits. Airtel wishes to assure its customers, employees and business partners that these judgments will in no way affect operations of Airtel Nigeria,”
The dispute dates to 2003, when Econet says a series of improper decisions taken by Nigerian members of the company resulted in the cancellation of Econet Wireless Ltd’s shares in the company, deletion of its name from the register of shareholders and change of name to Vee Mobile Networks.
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On 24 January 2012, the Federal High Court ruled that Econet’s shareholding in the company must be reinstated, according to the company’s website. It added that the judgment also said the name of the company, now Bharti Airtel Nigeria, should revert to Econet and all decisions in which it was entitled to participate as a shareholder but was prevented from doing so, are null and void.