Another twist in VMobile saga

Johannesburg, 06 Jun 2005

The directors of Nigerian operator VMobile have been sent a formal notification known as a 'Form 48`, according to an announcement made by Econet Wireless International (EWI).

This is in response to Friday`s reports that VMobile was in the process of negotiating with Virgin Mobile and Vodacom SA to sell shares in the company.

Lawyers representing EWI say Form 48 is a formal notification that the VMobile directors will be cited for contempt of court if they attempt to do anything, such as selling, transferring or in any way alienating EWI`s shares that would prejudice its disputed rights in VMobile.

EWI and VMobile have been involved in a dispute that has been on the go for nearly two years, triggered - according to EWI - by VMobile`s decision to sell a 51% controlling interest in the business to Vodacom SA.

EWI, which set up the Nigerian operation with funding from local investors and which also holds 5% equity in Vee Mobile, claims it had preferential rights to those shares.

In January, EWI obtained a court order preventing VMobile from proceeding with its intention to cancel the shareholder agreement and proceeding with an offer of shares to third-party investors until the legal dispute between the two had been resolved by the court.

The quarrel between the two organisations had gone before a three-member tribunal of the United Nations` Permanent Court of Arbitration (PCA) in Paris earlier this year, but instead of the expected final decision from the PCA, the court ruled it had no jurisdiction to make a decision.

The tribunal instead referred the matter to a new panel, which must be appointed by a Nigerian judge, without considering the merits of the case.

"The setting up of a negotiating committee, which has been negotiating with Vodacom, as well as holding board meetings to discuss the sale of shares and accepting such offers, if true, is in flagrant contempt of court by the board," says an EWI spokesman.

"Our lawyers are monitoring all these statements that are appearing in the press from Virgin, Vodacom and VMobile, and there is mounting evidence that there is contempt of the January court order in some of these reported activities."