O & O Networks Limited, which is owned by Ecobank Transnational Incorporated, could forfeit the sum of N22.5 billion that proceeded from the wrongful sale of shares in Airtel Networks Limited.
A court order has supposedly been issued, directing that the money to be transferred into the court’s account.
The court order follows a protracted dispute between Airtel’s former Chairman, Mr. Oba Otudeko, Broad Communications Limited, and O & O Networks Limited, which is now owned by Ecobank Transnational Incorporated. All the above-mentioned entities were founding shareholders of Airtel Networks Limited.
The genesis of the dispute
In 2006, Otudeko’s Broad Communications Limited filed a suit against the Delta State Government, challenging the latter’s acquisition of O & O Networks’ shares in Airtel Networks Limited.
According to the suit, the shares acquisition was illegal, thereby constituting a breach of an agreement earlier reached by the shareholders of Airtel Networks Limited.
According to the agreement, the Airtel shares sold to the Delta State Government should have first been offered the existing shareholders of, in line with Clause 17.2.1 of the Shareholders’ Agreement.
O & O Networks bought back the shares?
Following the suit against the Delta State Government, O & O Networks claimed that it had bought back the disputed shares from Delta State Government.
Consequently, the beneficial ownership of the Airtel shares was transferred to the now-defunct Oceanic Bank, which has long been acquired by Ecobank Transnational Incorporated.
But the disputed shares were once again offered for sale
In July last year, O & O Networks (now owned by Ecobank Transnational Incorporated), agreed to sell the disputed shares to Bharti Airtel for N22.5 billion. Note that Bharti Airtel is the parent company to Airtel Networks Limited.
The agreement to sell the shares to Bharti Airtel was a violation to a February 2015 injunction that was given by Federal High Court Justice – John Tsoho, which restrained every part involved from tampering with the disputed shares.
Justice Tsoho had given the injunction, pending the final resolution of the protracted legal dispute.
Meanwhile, Bharti Airtel was smart about the transaction
The parent company of Airtel Networks Limited was said to have ensured to indemnify itself as part of the purchase of the disputed shares. The company did this because it was aware of the controversies that surrounded the shares prior to this time.
The indemnity was practically meant to protect Bharti Airtel from any liability that could result from the transaction.
Earlier court ruling subsists
As expected, the recent sale of the shares reignited the legal dispute. Broad Communications filed to challenge the sale. And in her ruling, Justice Mojisola Olateru maintained that the earlier ruling by Justice Tsoho must be adhered to. In other words, O & O Networks/Ecobank were wrong to have sold the shares to Bharti Airtel.
What happens now?
O & O Networks/Ecobank will bear the risks emanating from the transaction, according to Justice Mojisola Olateru.
This is why she ordered the company and its owners (i.e., Ecobank Transnational Incorporated) to pay the N22.5 billion that proceeded from the sale into the court’s bank account, pending the final judgment.