Econet Wireless (EWN) owns 65% of Bharti Airtel with Court Ruling

Econet Wireless Nigeria (EWN) was founded as a subsidiary of Econet Wireless Group, and successfully bid for a mobile telecoms license in Nigeria in 2001.

In 2003, a series of improper decisions were taken by the Nigerian members of EWN, which resulted in the cancellation of Econet Wireless Limited’s (EWL) shares in EWN, the deletion of its name from the shareholders register, and a change of name from EWN to Vee Mobile Networks.

On 24 January 2012, the Federal High Court of Nigeria found in favour of EWL, on all counts in its legal case. The Honourable Mr. Justice Schauib ruled that EWL’s shareholding in the company must be reinstated, that the name of the company (now Bharti Airtel Nigeria) should be reversed back to EWN, and that all decisions in which EWL was entitled to participate in as a shareholder, but was prevented from doing so, are null and void.

Elsewhere, Econet Wireless is seeking at least $3.1 billion in damages from Bharti Airtel in a dispute over ownership of its subsidiary Airtel Nigeria, according to a suit filed on Wednesday.

"The move follows a Nigerian court ruling on Jan. 30 that Bharti Airtel's ownership of its subsidiary Airtel Nigeria is "null and void" because co-founder and 5 percent shareholder Econet was not consulted on the transfer.

South Africa-based Econet Wireless is disputing the Indian company's ownership of one of its top Africa operations. Bharti said last month that its stake in its Nigerian unit was "completely safe" and that the world's fifth-biggest mobile phone carrier by subscribers had appealed against the verdict.

"The claim for damages and equitable compensation against the Applicant and some of the Respondents might be in excess of $3 Billion," the document filed to the court said. "The above estimated damages might also be in addition to a claim for $100 Million received by the Applicant as fees for the management of VNL (Vee Networks Limited, a former name of Airtel) for a period of 6 years which sum should have accrued."

Bharti Airtel inherited the legal case as part of a $9 billion acquisition of Zain's Africa operations in 2010, including 65 percent of Zain Nigeria. The basis of Econet's claim is that its 5 percent stake was unfairly cancelled when Zain took control, so any decision made since then without it, including the transfer to Bharti, is void. The Nigerian court upheld that claim.

Nigeria contributes about 9.5 percent to Bharti's consolidated operational profits, the company says.Econet disputed the buyout of Airtel's stake from Zain Nigeria in 2010 because its right of first refusal over the stake was denied, in a dispute that had been ongoing since 2003, when the same assets were first sold to Vee Networks." (Reuters 22 February 2012).

Related  News:
Bharti Airtel faces $3.1Billion Law Suit
Court restores Econet Shares in Bharti

Bharti now has †̥ pay about $3billion,ℓ̊ guess zain might be going down too.

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