COURT STOPS MTL SALE IN MALAWI

Telecoms

The High Court has stopped privatisation of Malawi Telecommunications Limited (MTL) until a judicial review on claims that the Privatisation Commission (PC) violated the Public Enterprises (Privatisation) Act in the transaction is carried out.

High Court Judge Joseph Manyungwa granted the injunction in Blantyre Friday following an application by former MTL board member Kenneth Msonda, who acting as a concerned citizen, asked for the court’s intervention in the privatisation of the public entity.

Reacting to the injunction Sunday, acting executive director of PC Jimmy Lipunga said “naturally” his organisation would be challenging the court ruling.

The PC on December 13 last year announced the sale of MTL to an investment vehicle called Telecom Holdings Limited, a consortium led by Press Corporation Limited (PCL).

The announcement of the sale at K3,56 billion followed President Bingu wa Mutharika’s approval after a four month suspension.

However, in his submissions in December last year, Msonda’s counsel opposed the sale on grounds that it lacked transparency, there was wrong withholding of information to the public, sale price was below the market price and that the intended transaction did not accomplish objectives of the PEP Act.

Section 3 of the Act says privatisation programme’s objectives shall include fostering efficiency in the economy, increasing competition and participation by the Malawian public in enterprises and to raise revenue for the government.

Banda further argued that provisions of the PEP Act had been contravened and therefore the process was unlawful.

However, the PC counsel, Modecai Msisha objected to the granting of leave for a judicial review and wanted the court to dismiss the proceedings.

Msisha, just to cite a few, had argued that Msonda did not have legal capacity, right or interest in MTL to entitle him to commence and maintain these proceedings.

He added that Msonda did not have justifiable interest in MTL, which was entitled to protection by the proceedings.

Msisha also argued that the applicant would not suffer any injury from the privatisation of MTL.

However, in his ruling Justice Manyungwa agreed with Msonda’s lawyer Edwin Banda that his client had sufficient interest to seek redress in the matter.

The judge said Section 41 of the Constitution guarantees access to justice and legal remedies and that Msonda as a concerned citizen has a right and is entitled to access the court to seek justice and access to legal remedies.

“If the court finds that the applicant has merit in the reliefs that he is seeking from the court, it shall of course be the duty of the court to afford him an effective remedy. This, in my view, can only be achieved if people like the applicant are allowed access to the court. To shut them would in my considered view, be to defeat the spirit of the Constitution, and the intention of its framers,” Manyungwa’s ruling reads in part.

However, Manyungwa in his ruling said Msonda’s contention that the PEP Act had been contravened in the privatisation transaction had to be contested in the courts.

“…There is no doubt in my mind that the plaintiff has clearly shown to this court that there is a serious question to be tried, in fact very serious question indeed to be tried by this court,” the ruling reads in part.

Reacting to the ruling, Msonda said in an interview Sunday he was happy with the court injunction, saying it would pave the way for a thorough analysis of the process through a judicial review.

“The ruling serves the interest of Malawians. There is merit in having a judicial review of the entire process,” Msonda said.

However, Lipunga said it was unfortunate that such a ruling was made, saying there has been a lot of progress in the privatisation process of MTL.

“We’ve been transparent. You are aware when the sale was stopped there was a review. It’s unfortunate that the ruling has gone that way. It will just scare away investors,” Lipunga said.

He also said there was a cloud of uncertainty as to whether the ruling was based on the first injunction that Msonda had obtained or it was a new order altogether.

Besides, he said the ruling would have an effect on MTL employees.

The PC had completed the bulk of work leading to handover of the company slated for this week.

MTL has about 2,400 workers across the country that would receive their terminal dues in accordance with the privatisation agreement.

The Daily Times