Mergers, Acquisitions and Financial Results

Ruling on arguments to set aside an action against Areeba by a Ghanaian businessman, Richmond Aggrey, over the sale of the company for $5.83billion to MTN Incorporated of South Africa was given by an Accra commercial court.

Justice Henry A. Kwofie rejected Areeba's application made on July 25, 2006 by Scancom Limited, seeking to strike out the writ filed by the Ghanaian 20% shareholder and ordered the defendants to file their defence within fourteen days.

Handing down its ruling on pleas by lawyers for the owners of the Lebanese-owned company, citing fatal procedural irregularity, the court noted that in the situation where some of the defendants are in the jurisdiction of the court and others outside, no leave should necessarily be sought from a judge before serving the writ on the defendants.

According to the court, it would be unjust and unfair to make the plaintiff seek leave of the court before serving the writ on the defendants, Investcom Consortium Holdings SA (now Investcom LLC) of Beirut, the parent company, Scancom Limited, and Grandview Management Ltd in the USA.

What was required under the laws, the court intimated, was for the plaintiff to apply from the registry of the court a concurrent writ for service on defendants outside the jurisdiction, but contended that failure to do so does not make the whole writ irregular to render it a nullity as argued by Benson Nutsukpui, counsel for Scancom Limited. The court therefore held that failure to apply for the concurrent writ from the court was a defect in form but not sufficient to invalidate the writ in totality. The court has therefore fixed November 1, 2006 to look into the thrust of the issue presented by plaintiff, after notifying the defendants on what he intends to ask for.

The court on July 14, 2006 froze the deal in which Scancom Limited and its parent company in Beirut intended to sell the leading mobile phone service in Ghana to MTN Incorporated of South Africa, swerving the due date, July 17, 2006, that it ought to have been listed by MTN on the South African Stock Exchange. This followed an application made on behalf of Richmond Aggrey, claiming that the closure of the acquisition would occasion the loss of his shareholding in the company by reason of the accrual of the rights of the MTN Group as a third party.

Aggrey's contention was that his name had been removed from the shareholders list of Scancom Ltd without any explanation as a result of which he filed an ex parte motion for an interlocutory injunction against Investcom Consortium Holdings SA (now Investcom LLC) of Beirut, the parent company, Scancom Limited and Grandview Management Ltd in the USA to restrain them from dealing with the shares, stock and or interest in Scancom Limited in any manner.

According to him, if defendants are not restrained it would affect his 20 per cent interest in Scancom Limited. In an affidavit in support of his motion, Aggrey said Investcom Consortium, the majority shareholder of Scancom Ltd, was initially registered in Lebanon and the United Arab Emirates, while Grandview Management Ltd was a company registered in the Cayman Islands and nominated by him to hold his shares in Scancom Ltd in trust.

In the substantive case, Aggrey is claiming against the defendants, jointly and severally, an order directed at Scancom Ltd to pay him his true share of dividends declared in the 2000, 2001, 2002, 2003, 2004 and 2005 financial years, and in a manner that was proportionate to his shareholding with interest calculated at the commercial rate.

Additionally, he is seeking, among others, an order rectifying the membership of Scancom Ltd to include his name and restore him to his position as a shareholder and director of the company.

Ghanaian Chronicle