ECONET BOSS FEELS 'VINDICATED' AS NIGERIA CHARGES TRIO BUT HAS SETBACK AS OWN STAFF IN ZIMBABWE ARRESTED ON CURRENCY CHARGES

Telecoms

Econet Wireless International (EWI) boss Strive Masiyiwa says he has been vindicated after Nigerian authorities charged three VMobile Nigeria (formerly Econet Wireless Nigeria) directors over a corruption scandal that forced Vodacom to abruptly abandon its bid to take over the lucrative Nigerian telecoms firm earlier this year.

President Olusegun Obasanjo's office had directed Nigeria's Economic and Financial Crimes Commission to probe circumstances that forced Vodacom to pull out of Nigeria fearing that the west African giant's quest for foreign direct investment as well as its image in the international business community would be severely dented by Vodacom's departure. Four months after the probe, the Commission announced at the weekend that it had charged three VMobile directors with corruption.

Masiyiwa's EWI had fought with Vodacom in a bid to forestall the South African telecoms giant from acquiring a controlling stake in VMobile. He is still suing Vodacom for millions of rands for alleged inducement of breach of contract.

Vodacom had taken over the management and technical operations of EWI and rebranded it Vee Networks before it pulled out of the deal fearing that corruption allegations in the firm would plunge it into trouble with foreign shareholders. The firm was subsequently re-branded VMobile Nigeria after Vodacom's departure.

"The decision by the economic and financial crimes commission of Nigeria to charge the three directors of VMobile is a full vindication of my stance that some of the local shareholders had been involved in serious corruption," said Masiyiwa.

"Despite a concerted effort to intimidate me and attempts to silence me through the South African courts, I have always maintained my position that all was not above board in the dealings at VMobile," added Masiyiwa.

Masiyiwa's troubles in Nigeria started when the then EWI, in which he held 5 percent equity after bringing in other investors to raise the initial $285 million (R1.74 billion) required for the licence, cancelled his management contract and gave it to Vodacom, which was desperate to enter the lucrative Nigerian market to compete with MTN.

Masiyiwa argued he had pre-emptive rights to increase his equity in the firm to 33 percent and launched a legal battle to forestall Vodacom from taking over the firm. But Vodacom pulled out barely two months after it had begun negotiations.

Masiyiwa had always maintained that he was being victimised by Nigerian investors in the firm he founded because he was refusing to be part of their corrupt activities, including illegal payments of multimillion-dollar bribes to state governors who had invested in the firm using taxpayers funds.

Meanwhile five senior officials from Zimbabwe's largest cellphone network, Econet Wireless, were arrested and charged with "externalising foreign currency" on Friday. In what appears to be a police crackdown, the charges follow four similar arrests on Thursday, three from competing cellphone provider Telecel. Police swooped on the Econet offices in Harare, arresting its Zimbabwe chief executive officer Douglas Mboweni.

  The other arrests included executive director John Pattison and senior officials Nyasha Zhou and Anthony Eastwood. Their arrest brings to nine the number of Zimbabwean businessmen apprehended this week alone. Police spokesman Wayne Bvudzijena said all would be charged with "externalising foreign currency".

  He said Mboweni would also be charged "in his own capacity as an individual" for dealing in forex. Police claim that between March 2000 and September this year Econet bought USD1.3 million on the black market and were owed over USD3 million in deals not yet completed.

(SOURCES: Business Report and Business Day)