Nigerian court rules against VMobile

Johannesburg, 13 Jan 2005

The Federal Court of Nigeria ruled this week that VMobile (formerly Econet Wireless Nigeria) cannot change the company`s shareholding structure until its legal dispute with Econet Wireless International (EWI) has been resolved.

The order was granted after EWI`s lawyers submitted to the judge the agenda of a shareholders` meeting set for 25 January, which included matters that would affect its interests as a shareholder.

"EWI and VMobile reached an agreement in court that nothing would be done to alter the shareholding structure until such time as the arbitration hearing had gone before the Permanent Court of Arbitration (PCA) in The Hague," says EWI spokesman Zach Wazara.

"The PCA hearing is due to get under way from 31 January until 4 February, but VMobile`s planned meeting contained details regarding a planned change in the company`s shareholding, in contravention of the agreement we had reached earlier."

The PCA will rule on a shareholder dispute that was initially triggered as a result of a bid to take over the company by Vodacom SA, with EWI claiming it had preferential rights to the shares offered to the mobile operator.

He says the latest court order means VMobile cannot proceed with its intention to cancel the shareholder agreement and the memorandum and articles of association of the company, nor can it proceed with an offer of shares to third-party investors or the general public until the legal dispute with EWI has been resolved by the court.

"This will block any efforts by other companies - such as Vodacom and Virgin Mobile, which have both been rumoured to be interested in purchasing shares in VMobile - from doing anything until the PCA hearing has taken place," says Wazara.

"It`s been a slow process, but the various issues are finally coming to the fore and I believe we are being vindicated, although the crux of the matter will take place at the end of the month, when the result of the arbitration hearing is announced."