Econet injunction postponed again

Johannesburg, 06 Dec 2004

The Nigerian Federal Appeals Court has once again postponed its decision on Econet Wireless International`s (EWI`s) injunction against VMobile (formerly Econet Wireless Nigeria).

The decision was to be handed down on 1 December, but due to what was reported as a special meeting for the nation`s top judges, judgement was postponed until 9 December.

EWI is seeking the injunction in order to force VMobile 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.

"Should the judgement be in our favour, the injunction would come into immediate effect, and VMobile would have to change its name back to Econet Wireless Nigeria and restore the status quo of the company to the way it was as of October last year," says EWI CEO, Strive Masiyiwa.

The Federal Appeals Court`s decision on the injunction takes on a deeper level of importance in light of reports in Nigerian newspaper ThisDay, which suggest that Vodacom is ready to reopen negotiations with VMobile.

This comes only months after the South African company`s controversial withdrawal from Nigeria, which occurred weeks after signing a management contract with VMobile.

According to ThisDay, a letter communicating Vodacom`s change of mind on the matter was sent by Vodacom`s CEO to the CEO of VMobile, although whether Vodacom will get the chance to negotiate with the Nigerian company remains to be seen.

EWI`s shareholder dispute will go before the arbitrators from the UN Permanent Court of Arbitration in Abuja, Nigeria between 31January and 4 February 2005, and the outcome of this arbitration process will likely determine whether Vodacom can continue its negotiations.

The shareholder dispute was triggered by VMobile accepting Vodacom`s bid to take a 51% shareholding in the Nigerian operation, despite the fact that EWI considered itself to have preferential rights to those same shares.

"The arbitration court will meet at the end of January to decide on this issue, and I believe that the arbitrators will uphold our rights and grant us the 51% shareholding, and of course only one company can hold 51%," says Masiyiwa.