Econet disputes ownership of Zain Nigeria but Zain says it’s “a fantasy”
South Africa-based Econet Wireless is disputing Gulf carrier Zain's ownership of one of its most important operations, a long running legal challenge that has almost no chance of success. However Econet is seizing the opportunity to have another go at trying to put its case.
Econet said on Wednesday it disputed the purchase in 2006 by Celtel, now called Zain, of a majority stake in a group called Vee Networks Limited, now Zain Nigeria. Econet -- which has operations in nine countries in Africa, Europe and the East Asia Pacific Rim -- said in a statement it was pursuing arbitration proceedings because it believed it had been denied its right of first refusal over the stake.
It has now appealed to legal authorities including an international tribunal operating under the auspices of the United Nations for the transaction to be unwound. The South African group was a founding shareholder of Vee Networks and claimed that its right of first refusal over the stake was breached in 2006, when its Nigerian partners sold their shares to Zain.
Econet said that as part of the proceedings it had applied for interim measures to prevent Zain from selling, transferring, disposing of, dealing with or otherwise encumbering the disputed stake until the matter was resolved. Econet said Celtel had provided "certain undertakings to preserve the status quo".
However, Zain's Chief Executive Officer Saad al Barrak told reporters on Monday evening that he had not signed anything. "This has no basis whatsoever... This is a fantasy," he said, without commenting further on the case.