Vodacom quits Nigeria, legal disputes continue

Johannesburg, 31 May 2004

Although unconfirmed, it has been reported in today`s press that Vodacom is to withdraw from Nigeria, two months after formally announcing that Econet Wireless Nigeria (EWN) would be renamed Vodacom Nigeria, and would also rebrand all its products.

However, despite these reports, Econet Wireless International (EWI) says it will continue with its ongoing disputes and injunctions against the two organisations.

EWI has begun several cases against both Vodacom and EWN, regarding shareholding and management contract issues, and these are set to continue.

"As far as EWI is concerned, the legal proceedings we have instituted have specific objectives and these cases will continue until those objectives are achieved," says EWI spokesman, Kevin Kachidza.

"If Vodacom are withdrawing from Nigeria, it will certainly change the dynamics of the case, but we will certainly be continuing with our court actions."

The legal issues which may be affected by Vodacom`s withdrawal include a shareholders dispute, where EWI claims it had pre-emptive rights as an existing shareholder to purchase a further stake in the Nigerian operation, although EWN chose to offer this stake to Vodacom.

EWI is waiting for the International Court of Arbitration (ICA) tribunal to set dates for the hearings, which are expected to begin before the end of June and should be completed by July, although it may take another two months for the tribunal to reach a decision.

The company also has a dispute regarding the cancellation of its management contract with EWN, which it claims was irregular and should therefore still be in force, despite the fact that EWN has since signed a new deal with Vodacom for these services.

This dispute has been taken before an arbitrator appointed by the British Law Society and a hearing date has been set for 17 June, with a ruling anticipated sometime in August.

"Our concern regarding the management contract is that we say it was terminated illegally and as such, we believe it should still be in force. We will therefore continue with our case until such time as the contract is honoured," says Kachidza.

"In fact, since we have had no formal confirmation regarding Vodacom`s withdrawal from Nigeria, EWI feels that as far as the various legal issues go, it remains very much a case of business as usual for us."

When contacted, Vodacom refrained from commenting on the issue, saying only that a statement would be released to the media during the course of the day.

ITWeb will update readers on Vodacom`s position once its statement has been received.