The Federal High Court in Abuja has set aside the sale of Etisalat (9mobile) to Teleology Nigeria Limited.
Justice Binta Nyako in a ruling on Thursday also voided all steps taken on the exchange of ownership of Etisalat, in spite of pending orders for the maintenance of status quo.
Nyako, who held that parties were all aware of the existence of the suit (the defendants having been served between April 24 and 27, 2018 with the originating process), faulted the sale of the company as claimed by the plaintiffs in a motion filed on November 16, 2018.
“Any action that has been taken concerning the subject matter of this litigation from April 25, 2018, which is earlier in time, should revert to the original position,” she said.
The ruling was given in a suit No. FHC/ABJ/CS/288/2018 filed on April 6, 2018 by two major investors in Etisalat: Afdin Ventures Limited and Dirbia Nigeria Limited.
Afdin and Dirbia, whose investments in Etisalat were estimated at $43,033,950, had gone to court to retrieve their stakes on the ground that they were aggrieved, having been excluded from the decision making process of the company.
Defendants in the suit include Karington Telecommunication Ltd, Premium Telecommunications Holdings NV, First Bank of Nigeria Plc, Central Bank of Nigeria, Etisalat Nigeria Ltd and Nigeria Communication Commission (NCC).
The plaintiffs stated in a supporting affidavit to the motion dated November 16, 2018 that they resorted to praying the court to void the sale of Etisalat upon learning that the defendants had proceeded to conclude the transfer of the company’s ownership despite the restraining orders made earlier by the court.
They said: “In 2009, the plaintiffs/applicants purchased a total of 4,303,391 class “A” shares from the first, second and the fifth defendants (Karington, Premium Telecommunication and Etisalat International) at the rate of $43,033,950 only, and were issued with share certificates.
“In 2010, the defendants rebranded Etisalat Nigeria Limited to 9mobile and entered into negotiations with Smile.com and Glo Network to transfer its licence without recourse to the plaintiffs.
“When the plaintiffs became aware of the purported transaction, they filed this suit along with a motion ex-parte and motion on notice, seeking an order of injunction to restrain the defendants from going ahead with the transaction.
“When this suit came up for hearing on April 17, 2018, this court ordered parties to maintain status quo pending the determination of the motion on notice.
“Notwithstanding the aforementioned order, the defendants continued negotiations with Smile.com and Glo Network in defiance to the subsisting order of this court.
“When the plaintiffs/applicants discovered that the defendants were bent on selling Etisalat Nigeria Limited rebranded “9moile” despite the subsisting order of court, they instructed their counsel, Mahmud A. Magaii (SAN), to write and caution the defendants on the implications of their actions.”
They added that upon receipt of the above letters, the third and the fourth respondents (First Bank and Central Bank), through their counsel, Olaniwun Aiayi, wrote to the applicants, denying the existing of the order of status quo made by the court on April 17, 2018 and August 31, 2018.
“When this matter came up October 10, 2018, counsel to the plaintiff, Okechukwu Edeze, informed the court of the attempts made by the defendants to sell Etisalat Nigeria Limited.
“Consequently, this court made another order of status quo, directing parties to refrain from tampering with the subject matter of the suit.
“Despite the orders of this honourable court, the defendants went ahead and sold Etisalat Nigeria limited, rebranded 9mobile to Teleology Nigeria Limited with impunity.
“It will be in the interest of justice to set aside the sale of Etisalat Nigeria limited rebranded 9mobile to Teleology Nigeria Limited and commit the defendants to prison for disobeying the lawful orders of the court.”
But reacting to the development, the management of Emerging Markets Telecommunication Services Ltd (EMTS), which traded as Etisalat, said the news that a court nullified the sale of EMTS to Teleology Nigeria Limited is not true. It described the report as incorrect, misleading and mischievous and a total falsehood.
“The Federal High Court, Abuja did not nullify the sale of EMTS. The court on April 1, 2019 made an order for parties to maintain status quo as at April 25, 2018. As at the said date, EMTS (9mobile) was not a party to the suit before the court. The action before Justice Binta Nyako of the Federal High Court is not about the sale of EMTS (9mobile) but rather, the transfer of the licence even without locus standi,” the telecommunications firm claimed.
According to Company Secretary/Legal Adviser, 9mobile, Ore Olajide, “The sale of 9mobile to Teleology Nigeria Limited has not been nullified. The court made an order to maintain status quo as at April 25, 2018 when EMTS was not a party to the suit and we have appealed the ruling as well as sought an injunction pending appeal at the Court of Appeal.”
Olajide said EMTS is assuring its subscribers and stakeholders to remain calm as matters are under control. “We are working with our team of legal counsel to follow through, as deemed necessary. EMTS remains focused on providing best in class telecommunication services to its subscribers and will provide necessary updates in due course,” he said.
The president, Association of Telecommunications Companies of Nigeria (ATCON), Olusola Teniola, however downplayed the matter, stressing that the industry remains positive.
He told The Guardian that the actual issue is about minority shareholders versus majority shareholders and transfers of shares. “It has nothing to do with the operations of the company, whose sales to Teleology Holdings was midwifed by Barclays Capitals. The actual operation of 9mobile is not impacted. It is purely a corporate governance board issue, which will be sorted out,” he said.
As at January, according to the Nigerian Communications Commission (NCC) 9mobile had only 16.4 million subscribers and controlled 9.44 per cent market share.