Vee Networks (previously Econet Wireless Nigeria, or EWN) maintains that Vodacom`s exit from Nigeria follows a mutual agreement between the two organisations, and is not due to any corruption on its part.
The Nigerian press recently reported that Vodacom had objected to the payment of hefty, and allegedly corrupt, 'brokerage fees` to Nigerian go-between companies that had solicited state government investment.
Vee Networks now claims that just last week, Vodacom issued a statement to the effect that it did not find any evidence of corruption in the Nigerian company, following a thorough due diligence.
"The previous management of EWN paid approximately 50% of brokerage fees, as approved by the board of EWN in 2002, during the course of 2003. These brokerage fees were for raising equity in EWN," says the Vodacom statement.
"After receiving allegations that the monies so paid in 2003 were improper, Vodacom engaged the services of expert legal counsel to do a due diligence in order to ascertain whether those allegations were true."
The statement claims that as a result of the ensuing due diligence, legal counsel concluded that no evidence could be found to suggest they were improper and the balance of approximately 50% of the brokerage fees remained outstanding.
In another statement, made jointly by the two organisations yesterday, they said the management contract between the two businesses has been terminated on an amicable basis.
This termination comes just two months after Vodacom signed a five-year management contract with EWN, which included the rebranding of products and the stipulation that EWN would be renamed Vee Networks and would trade as Vodacom Nigeria.
Further fallout from Vodacom`s withdrawal from the West African country has seen the contract of deputy CEO, Andrew Mthembu - widely viewed as the heir apparent to current CEO Alan Knott-Craig - terminated as of the end of May.
The company`s group strategy director, Robert Pasley, has also resigned, while Willem Swart has quit Vodacom to pursue a career as CEO of Vee Networks.
In the joint statement, Oba Otudeko, chairman of Vee Networks, and Knott-Craig agreed that in order to ensure a smooth transition, Vodacom would continue to provide technical support for a period of up to six months.
Knott-Craig also added that Vodacom would continue to take an interest in the success of Vee Networks.
Legal issues
Both Vodacom and Vee Networks still have legal issues hanging over their heads, following several cases brought against them by SA-based Econet Wireless International (EWI).
EWI is involved in a shareholders dispute with Vee Networks, claiming it had pre-emptive rights as an existing shareholder to purchase a further stake in the Nigerian operation, although Vee Networks chose to offer this stake to Vodacom.
The company also has a dispute regarding the cancellation of its management contract with Vee Networks, which it claims was irregular and should therefore still be in force.
What will happen now that the Vodacom management contract - which superseded EWI`s contract - has been cancelled remains to be seen.
EWI also has an application before the Nigerian High Court in which it is suing Vodacom for inducement of breach of contract.
EWI states it had an agreement with Vee Networks, concluded in May last year, in which the two parties agreed that EWI would invest $150 million and increase its shareholding to 33%, but while this agreement was being implemented, EWI claims that Vodacom made an unsolicited offer to Vee, despite knowing of the existence of the pre-existing agreement with EWI.
The offer made by Vodacom resulted in the Nigerian shareholders of Vee Networks breaching the contract they had with EWI, hence the company`s legal action against Vodacom.
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Vodacom quits Nigeria, legal disputes continue
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Vodacom, EWN: Five-year or five-day deal?
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