Mergers, Acquisitions and Financial Results

Econet Wireless International has submitted a claim for damages to the Nigerian High Court in its case against Vodacom. A legal challenge, which was filed against Vodacom in October, states that Vodacom attempted to purchase $150 million of equity in Econet Wireless Nigeria (EWN), while the sale of the shares was already under way to Econet Wireless International (EWI).

The action, which was filed with the Nigerian High Court, states that Vodacom attempted to "induce a breach of contract". EWI claims it has prior rights to the equity as an existing shareholder.

"The Nigerian High Court asked us to provide a statement of claim, and we have submitted statements on a month by month basis," says Strive Masiyiwa, EWI CIO. "The level of the claim will depend on whether or not EWI is restored to its contractual position, and when that happens. If EWI loses its investment completely, then the judge could grant damages well over $1.5 billion."

Masiyiwa says Bart Dorrestein and Ovie Ukeke, go-betweens who were instrumental in the deal, have also been enjoined to the lawsuit. "Evidence has come to light that both these men acted on behalf of Vodacom in negotiations with EWN from as early as June 2003 and we therefore claim they have also played a role in the breach of contract," says Masiyiwa.

He also states that EWI has asked the Law Society of England to appoint arbitrators to hear the case regarding the breach of the conditions of the management contract. "We have taken this matter to international arbitration because we consider the breach of contract to be so serious," he says. The case will commence in the Nigerian High Court this Tuesday

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