LapGreenN expansion in Sierra Leone stalls

Mergers, Acquisitions and Financial Results

As a recent court injunction postpones indefinitely the expansion plans of Libya-based Lap Green Networks in Sierra Leone, company executives say they have documentation countering claims from the founder of Ambitel, its subsidiary in the country.

Lap Green Networks, known through its brand LapGreenN, bought an 85 percent stake in Ambitel in 2007, and with it secured a national license to provide GSM, WiMax and ISP (Internet service provider) services. However, Ambitel's founder, Michael Kenneth Ondaan, has claimed that Lap Green has not fulfilled contractual obligations related to the sale.

A court injunction requested by Ondaan and issued two weeks ago prevents LapGreenN from launching services or merging with another telecommunications company pending arbitration of the dispute.

In March, Ondaan claimed that conditions attached to the sale of the controlling stake of Ambitel to LapGreenN, which included an outstanding balance due him and an agreement on a brand name for the telco, had not been met. Ondaan also said that the only response from LapGreenN had been an offer to sell his remaining shares in the company for US$50,000.

But Ambitel CEO John Weir denies the company is in any way indebted to Ondaan.

"It is clear and evident to us that we have completed all our obligations to MKO (Michael Kenneth Ondaan) and that he has no case against us," Weir said.

In December 2007, LapGreenN entered into an agreement with Ondaan that called for LapGreenN to purchase 85 percent shareholding of Ambitel for a cash consideration of $5 million, of which $1,576,700 was paid directly to the national authority NATCOM and $3,423,300 was paid into an escrow account in Geneva, Weir said. Ambitel has documentation showing that it has fulfilled contractual requirements.

"Ambitel obtained a written statement from the escrow lawyer (Patrick Chabrier) in April 2013 confirming that all the funds ... were paid into the escrow account by LapGreenN," Weir said. "We have also received a copy of the disbursement instructions given to the escrow lawyer by MKO ordering the lawyer to disburse funds to three separate parties (one of the parties is MKO)."

Weir also said that Ondaan's claim that he still owns 15 percent of the company is incorrect. Ondaan still owns 10 percent of the company, and 5 percent is owned by "another individual," Weir said.

"We did enter into a settlement discussion with MKO to purchase his remaining shares in the business, but MKO has so far declined to accept our offer," Weir said.

Ambitel had been expected to introduce services in Sierra Leone by April 2011 when the country marked its 50th independence anniversary, but the planned launch got stalled by the crisis in Libya. In the past year, recruitment notices have been advertised in newspapers and there are reports that several Sierra Leoneans have been put on standby for a possible start of operation.

However, the plan will take some time to be launched, as dispute arbitration may take months. The delay for the time being also blocks any hope that Ambitel can capitalize on the growing dissatisfaction of mobile phone users in Sierra Leone, due to what is perceived as the poor general quality of services being offered presently by the three main telecom companies.

"Ambitel is still committed to launching operations in Sierra Leone as we see a large potential in the market and we also want to provide all Sierra Leonean citizens with quality mobile services," Weir said, adding that the company is "continuing to appeal this case, which we feel has been erroneously judged."