Econet case moves towards conclusion

Johannesburg, 01 Oct 2004

Econet Wireless International (EWI) will know within six weeks whether the Nigerian Federal Appeals Court will uphold its injunction against Vee Networks (formerly Econet Wireless Nigeria).

EWI is seeking to force Vee Networks to reverse all the decisions that have been taken at the company since October 2003, pending the outcome of its shareholder dispute that is to go before the UN Permanent Court of Arbitration (PCA).

The shareholder dispute, which forms the core issue between EWI and Vee, was initially triggered as a result of a bid to take over the company by Vodacom SA, with EWI claiming that it had preferential rights to the shares offered to the mobile operator.

On Wednesday, the appeals court heard arguments in the appeal by Vee Networks, and set 11 November as the date on which it will hand down judgement in the matter.

If the court dismisses the appeal by Vee Networks, the Nigerian Federal High Court judge who was forced to stay the proceedings by the appeal to the higher court is expected to grant the injunction requested by EWI.

The injunction will force Vee to set aside, among others, the following decisions and resolutions:

* The decision of 9 November 2003, approving a management agreement between Vee and Vodacom;

* Resolutions passed at Vee`s AGM on 19 December 2003, approving the management agreement;

* The appointment of a new CEO (Willem Swart) and a new management team for Vee Networks; and

* Decisions changing the name Econet Wireless Nigeria to Vee Networks.

Meanwhile, the three-member PCA tribunal at The Hague in the Netherlands has ruled on a programme that is to be followed by all parties, leading to a determination of the shareholder dispute.

The tribunal originally set 29 November to 3 December as the dates on which the arbitration was to be heard, but due to the non-availability of Econet`s lead counsel, an extension has been granted and the hearings will now be held on 31 January to 4 February 2005.

"The arbitrators` decision will be final, meaning that this is basically a winner-takes-all process - which is exactly the way I like it," says EWI`s CEO, Strive Masiyiwa.

He says the reasoning behind going to the PCA is because Nigeria is a signatory to the UN charter, so the government will quickly enforce any ruling made by the international body.

"We wanted something that would definitely bind the government into enforcing a ruling, and we wanted a process that would be fast-tracked and be final and binding," says Masiyiwa.