A Federal High Court presided over by Justice Abdulahi Mustapha, will today resume hearing in suit by Oba Otudeko, Foluke Otudeko and Broad Communications Ltd, against Jubril Adewale Tinubu and Henry Efe Imasekha, over the sale of their Vee Network Ltd shares to some organisations without first offering them (plaintiffs) the right to buy the said shares.

Plaintiffs in the suit are contending that Tinubu and Imasekha, sold their shares in Vee Network, contrary to the shareholders agreement of April 30, 2002 and are asking the court to declare that the sale was in breach of the said shareholder agreement.

  Defendants in the suit are Vee Networks Ltd (formerly Econet Wireless Nigeria Ltd, EWNL), Celtel Nigeria BV, Jubril Adewale Tinubu, O and O Networks Ltd, Henry Efe Imasekha, DSTG Econshares Ltd (formerly Bromley Investments Ltd), Delta State Ministry of Finance Inc, Delta State Government and Corporate Affairs Commission (CAC).

At the last hearing in the matter, Celtel Nigeria Ltd asked the court to allow oral evidence to resolve the issue of whether shareholders Econet Wireless Nigeria Ltd, now Vee-Network Ltd, agreed on an oral agreement, which the plaintiffs are claiming, gave existing shareholders (of Vee-Network) the right of first purchase/refusal, in the event any shareholder want to sell of his share, before it is offered to an outsider.

Celtel counsel contended that "the claim of the plaintiffs was that there were two attempts by the respondents to sale their shares, which breached their (plaintiffs) rights of first purchase or refusal. The plaintiffs are seeking to establish a case that this was a breach of the agreement".

According to him, "counsel to the 3rd to 8th respondents had argued that the share transfer occurred before the shareholders agreement of April 30, 2002 was entered, but the first share transfer took place in 2001, so it cant be argued that the sale did not breached the shareholders agreement, because the plaintiffs were citing oral agreement that occurred between the shareholders, which made the first sale subject to the shareholders agreement".

"This agreement has been controverted by the averment of the 3rd to 8th respondents. It is impossible to resolve this issue of whether there was an oral agreement made subject to the shareholders agreement, which will make the respondents liable if there was one, without hearing oral evidence", he added.

Counsel to Econet Wireless Ltd (EWL), Prof Alfred Kasumu (SAN), while opposing the application, contended that "Celtel's counsel had summarised the issue in this case. It is that shares were transferred by shareholders to the shareholders agreement, in breach of the pre-emptive right contained in the shareholders agreement, that in summery is what the court is being asked to decide in the originating summons".

"The court has before it, the shareholders agreement and the court will see the parties to the shareholders agreement. The court will find in the exhibits before the court the list of the subscribers of the shares, which was signed on April 30, 2002. The court will find there, that O and O Networks Ltd signed the agreement and the number of shares held by it. It is the transfer of this share in breach of the agreement that is the subject matter of this suit, as they did not comply with the pre-emptive right of the other shareholders".

"The question I ask is, can’t this court looking at the questions raised in the originating summons by looking at the shareholders agreement, the parties to the agreement and the documentary evidence in support of the originating summon to prove that this shares have in fact been transferred. The plaintiffs have exhibited document to show the transfer of the shares by some of the shareholders listed as shareholders in the shareholders list. Whether or not they have a good defence for so doing, that I submit is not a disputed fact.

If the plaintiffs in this suit show the list of the shareholders and the documents are correct and that the shares have been paid for, that is not a disputed fact. The dispute as to facts or that the shares were transferred to another company, that is not the issue. The issue raised by counsel to 3rd to 8th respondents that the court can covert the originating summon into a writ is not the issue before this court. Respondents contention has nothing to do with the main issues raised before the court".

"What the court should decide is whether there has been a breach and if there has been a breach, what is the remedy. The issue of fraud raised by counsel to the second respondent has no relevance to the application before this court. Fraud is not being raised before the shareholders agreement. I don't see how this has any impact on the matter before the court. It is not fraud in respect of shareholders agreement. The shareholders who signed the agreement have not disputed the agreement and non of the party is saying that it is not his signature that is on the document. I don't see how fraud will effect the issue of breach of the shareholders agreement. I urge the court to refuse the application", Prof Kasumu contended.

Plaintiffs in the suit are contending that the purported sale of O and O Networks Ltd shares on July 15, 2003 and Bromley Investments Ltd (now DTSG Ecoshares Ltd) on July 21, 2001 respectively to Delta State Ministry of Finance Incorporated and the Delta Government, is an unlawful sale, transfer, encumbrance or disposal of all the 9,906,250 ordinary shares and 5,000,000 held by Tinubu and Imasekha respectively in Vee Networks Ltd.

They are further contending that the acquisition by the Delta State Ministry of Finance Inc and Delta State Government of the additional membership rights accruing upon the 9.90-6.250 ordinary shares of 5,000,000 shares held by Tinubu and Imasekha respectively in Vee Networks Ltd, was unlawfully acquired by way of right issues and bonuses.

Plaintiffs also want the court to declare that the purported sale of O and O Networks and DTSG Ecoshares Ltd are each a "triggering event" within the meaning of clause 17.4 of the Shareholders Agreement (SA) dated April 30, 2002 which are automatically subject to legal consequences prescribed in SA.