FLAK FLIES IN BATTLE FOR CONTROL OF ECONET WIRELESS NIGERIA

Mergers, Acquisitions and Financial Results

The attempt to recapitalise Econet Wireless Nigeria is causing major turbulence amongst the shareholders and management of the company:

- The three State Governments that are shareholders Lagos, Akwa Ibom and Delta are said to be angry that Econet Wireless International has not invested any of its funds in the company but had been given 5% of the shares. Where do these claims come from? Anonymous sources. Initial disputes over how the company was to be capitalized clearly still rankle.

- The Zimbabwean Chief Executive of the company Mr Wazara was sent on leave several weeks ago after it was claimed that he made executive and administrative decisions injurious to the organisation. The Nigerian investors are questioning some deals and contracts that were entered into by Mr Wazara on behalf of Econet Wireless Nigeria.

- According again to those anonymous sources:"Some of those contracts are the signing of a technical support agreement (TSA) with a 3 percent management fee over and above international standard of 1,5 to 2 percent, the supply of one satellite transponder by ESS at US$4 million as against the international going rate of US$1,75 million based on alternative quotations, and the appointment of handset suppliers and cell site builders," said a source.

- Vodacom’S bid for Econet Wireless Nigeria (EWN) has hit a fresh snag after another EWN shareholder instituted a second court challenge to force the South African cellular company to abandon the bid.First Bank of Nigeria filed an application in a Nigerian federal court this week in which it asked the court to restrain EWN from "accepting, considering, deliberating any offer for shares or other equity interest" from Vodacom.

If the Nigerian shareholders and EWI cannot find a way to patch up their differences or agree on how they go their separate ways, they will not have much of an asset left to argue over.