Econet injunction hearing postponed

Johannesburg, 15 Apr 2004

The Federal High Court of Nigeria has adjourned the injunction hearing brought by Econet Wireless International (EWI) against Vodacom SA and Econet Wireless Nigeria (EWN) until 29 April.

EWI has filed the injunction against the two companies following their announcement that they have signed and implemented a five-year management agreement.

According to Vodacom, EWN will start trading under the Vodacom brand with immediate effect and Vodacom will also provide additional support in respect of procurement, network design and roll-out products and services, marketing and other group services.

However, the injunction has been brought following the institution of an earlier arbitration process by EWI - which is to be heard by the International Court of Arbitration in Paris - as it claims its preferential rights to acquire further shares in EWN have been ignored, with the Nigerian company instead offering the shares to Vodacom SA.

EWI wants the injunction in order to prevent the allotment of shares to Vodacom, the change of the name of the company to Vodacom, and the conclusion of a management agreement with Vodacom.

"Essentially, the injunction will mean that they will be prevented from materially changing the nature of the company until the arbitration process in Paris is completed," says EWI spokesman, Kevin Kachidza.

He says that the original evidence EWI supplied to the Nigerian court was based on the minutes of two board meetings - the first where the offer of shares was made to and accepted by EWI, and the second where the same offer was made to Vodacom in violation of the deal with EWI.

"The copies of the minutes that EWI had were, however unsigned, leading the judge to say he would reconsider the evidence should we provide him with a signed copy of the minutes," says Kachidza.

"We have since subpoenaed the company secretary of EWN, in order to obtain a signed copy from their company records, but they have objected to this, leading to the current delay."

"EWN seem intent on arguing why we should not subpoena their company secretary, rather than the actual issue of the board minutes, which is the crux of the matter."

He says that once the judge has copies of the relevant minutes, he will first have to determine whether an offer of additional shares was made by EWN and accepted by EWI, and then whether the offer made to Vodacom infringed on EWI`s preferential rights.

"We are hoping the judge will make a swift ruling once all arguments have been heard, and are confident that we will have a decision sooner, rather than later."