Last week's Federal High Court decision that it has the jurisdiction to appoint arbitrators in the dispute between shareholders of Vee Mobile, formerly Econet Wireless Nigeria has left the joint Vodacom/Virgin offer to the company's shareholders in limbo.

A Virgin spokesman told the Financial Gazette: "We are awaiting a decision from the owners of V-Mobile over the bid, which has still not been forthcoming, and we will be considering our position over the next few weeks." Virgin has said it would make an announcement soon on the matter, but would continue to cooperate with the South Africans for the time being.

The Nigerian Federal Court has dismissed an application by 14 of the 22 shareholders who claimed that the court could not hear the matter and should instead refer it to the State High Courts.

Econet has spent US$1 million in the case, and Masiyiwa, in describing the ruling as "a major breakthrough" says there would be no let up until his company took control of the Nigerian investment. "I will not rest until I buy the 51 percent stake in Vee Mobile," Masiyiwa said. Econet holds five percent of Vee Mobile.

The legal battle over which court had jurisdiction over the case arose after arbitrators appointed by the International Court of Arbitration (ICA) ruled that a Nigerian court, and not the ICA, should have appointed them.

The case has now been adjourned to November 23 when Econet's lawyers will press for the reinstatement of the original team of international arbitrators appointed by the ICA so as to speed up the conclusion of the two-year old dispute.

The battle for Vee Mobile partly contributed to the breakdown of Econet's joint venture with Altech in September. Masiyiwa accused Altech of secretly seeking a settlement with Vodacom, resulting in a public spat that ended with Econet buying out Altech for US$87.5 million.

Meanwhile, Kuwaiti mobile group MTC is considering making a bid for the company, according to Reuters.‘We have an interest in Africa in general and in Nigeria in particular,’ an unnamed official told Reuters. When asked if MTC was interested in Vee Networks, which trades under the brand name Vmobile, the MTC official said: ‘Possibly’.

Vee Networks is 60% owned by private investors and 40% by state-controlled investment companies. Its biggest shareholders are First Bank of Nigeria (20.1%), AKIIPOC (18.1%), Broad Communications (13.1%), Delta State Ministry of Finance (10.7%), Ibile Holdings (10.7%) and O&O Networks (10%).

Financial Gazette

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