TELKOM MALAYSIA IN FAST TRACK COURT TO CHALLENGE GHANA TELECOM
Telekom Malaysia’s subsidiary G-Com Limited has filed a writ of summons and a statement of claim against Ghana Telecommunications Company Ltd (GT), a company that Telekom holds 30 percent investment in through G-Com, at the Fast Track High Court of Ghana. Telekom wants the court to declare the contract and loan arrangements by GT null and void.
It also wants an injunction restraining GT from implementing the contract and loan arrangements unless and until the appropriate corporate and approval processses were duly complied with by GT in accordance with its company regulations and the Ghanaian Company Code (GCC), general damages and related costs.
Telekom said this in a statement to the Kuala Lumpur Stock Exchange (KLSE) regarding the developments of the company’s investments in GT. It said that G-Com is currently in litigation against GT arising from illegal reconstitution of the GT board of directors on June 3, 2002. Telekom has also initiated arbitration proceedings against the government of Ghana under the Ghana-Malaysia Bilateral Investment Treaty for the same reason.
Telekom said that the contract and loan arrangements sought to be declared null and void included the Alcatel contract purportedly approved and ratified by the GT board on Aug 4, 2003 and the originally syndicated loan of USD50 million purportedly approved and ratified by the GT board.
The company also wants the court to declare null and void the USD70 million buyers credit insured by China Export Credit Insurance Corporation to part finance the purchase of equipment supplied by Alcatel Shanghai Bell Company Ltd (Sinosure Facility). This was purportedly approved and ratified by the GT’s extraordinary general meeting (EGM) on Oct 20, 2003 and an annual general meeting (AGM) on Dec 19 2003.
Another decision which Telekom wants to be declared null and void is the USD10 million working capital facility which was purportedly approved by the Dec 19 AGM. G-Com representatives on the board of GT and its proxy had at the various board meetings, EGM and AGM voted against the various resolutions pertaining to these contracts and loan arrangements (the Alcatel contract, original syndicated loan, the revised syndicated loan, the Sinosure facility and the working capital) due to the lack of information despite having made numerous requests for such information.
Telekom said that G-Com is not in a position to determine whether such arrangements are in GT’s best interest. Under the GT company regulations and the GCC, shareholders at the AGM cannot seek to overturn the board of directors’ decision by approving what the board has decided not to approve. In addition, at the Dec 19 AGM, G-Com voted against a resolution to approve the Telenor Management Agreement dated Dec 16, 2002, an agreement for the provision of management services to Ghana Telecom, which was entered into unilaterally by the government of Ghana and Telenor Management Partners, without consent of G-Com or GT.
If the Ghanaian courts acknowledge that Telekom Malaysia has a case, it will speed up the need for the Ghanaian Government to buy it out or reach a compensation agreement with the company.