A Federal high court sitting in Lagos, Southwest Nigeria has adjourned till 2 May 2018 for the hearing of $28,728,125 suit jointly instituted by industrial mogul Oba Otudeko and Broad Communication Limited against a cellular mobile telecommunications company, Airtel Networks Limited (formerly known as Econet Wireless Nigeria Limited) and nine others.
Joined as co-defendants in the ensuing legal battle are: a promoter of Econet, Jubril Adewale Tinubu, with 9, 906, 250 shares being 9.9% voting capital, O&O Network Limited, Delta Ministry of Finance Incorporated, Delta State Government, Corporate Affairs Commission, Econet Wireless Limited, Econet Development Corporation, Ecobank Nigeria Limited, Ecobank Transnational Incorporated.
According to an amended statement of claim filed on behalf of Oba Otudeko and broad communications limited by Chief Wole Olanipekun SAN, OFR, the plaintiffs alleged that sometime in 2011, Ecobank Transnational Incorporated acquired the defunct Oceanic Bank Plc with all its liabilities and assets which at the time of acquisition included the 3rd defendant O&0 Network limited.
But prior to the acquisition of Oceanic Bank the plaintiffs became aware that the 4th defendant, Delta State ministry of Finance incorporated and the 5th defendant Delta State Government purportedly transfer their beneficial ownership in the shares of the O&0 Network Limited back to 2nd defendant Jubril Adewale Tinubu who subsequently purported to transfer the shares to Oceanic Bank Plc as part of a process of securitization and foreclosure arising from loans advanced to him by Oceanic Bank.
The plaintiffs stated further that in the course of promoting Airtel, it was a fundamental term that in order to facilitate financing arrangements, Nigerian individual shareholders would take their shares in their own names or by the agency of their respective nominee vehicles.
By this agreement Oba Otudeko was to hold directly or indirectly, 15% of the ordinary shares and Jubril Adewale Tinubu was to hold directly or indirectly about 10% of the ordinary shares of the company.
Further to the above arrangement and as preliminary step towards the acquisition of 40% equity stake in Airtel, Oba Otudeko and Adewale Tinubu through a special purpose corporate vehicle called First Independent Network Limited, FINL, executed a settlement agreement dated 11 June 2001 with Econet International Limited.
READ: Apapa Traffic: Lagos takes over Orile-Iganmu 3000-capacity truck terminal
It was also selected as fundamental term of the agreement that Nigerians would hold 40% of the ordinary shares and that Econet Wireless International, EWI, being the original technical partner would hold 40% while 20% was reserved for Transtel -a South African company.
Oba Otudeko took 13,035,936 shares in the name of Broad Communication and 187,500 in his own name, while Adewale Tinubu took 9,906,250 shares in the name of Ocean & Oil Services which was later transferred same to O&O Network.
Photo: Wale Tinubu (Twitter)
The shareholders agreement confers on the shareholders a “right of first refusal” in relation to the disposal of shares or interest therein by any conceivable means and outlined procedures to be followed for giving notice of intention to dispose and further mechanism for dealing with such shares.
However, the plaintiffs alleged further that sometime in 2005 without any formal or informal notice they became aware that in 2001 and 2003, Jubril Adewale Tinubu acting as the alter ego of O&0 Network reached secret agreements to transfer all the company’s share in Airtel to Delta State Ministry of Finance Incorporated and Delta State Government for a premium.
The 9,906,250 ordinary shares of the O&0 Network sold, in breach of the plaintiffs pre-emptive right was valued at $4.50 thereby amounting to $44,578,125.
The transaction was deliberately concealed from the plaintiffs and other shareholders with Adewale Tinubu continuing to claim that he represented himself rather than the Delta State Ministry of Finance Incorporated and Delta State Government on the board of Directors of Airtel.
The plaintiffs averred that Adewale Tinubu and one David Edevbie, the then Commissioner for Finance and Economic Planning in Delta State made statements to the Economic and Financial Crimes Commission EFCC in or about August-November 2004 admitting that the respective transactions entered into between them had the sole objective of dealing in the shares of Airtel contrary to the agreement and the understandings binding parties and other shareholders in the Airtel company.
On 11 March 2013, the plaintiffs divested their interest in the Aitel Company.
The value of the 9,906,250 ordinary shares sold by Adewale Tinubu and O&0 Network to Delta State Ministry of Finance Incorporated and Delta State Government in breach of the plaintiffs pre-emptive rights had appreciated in value from $4.5 per share to $7.4 per share as at the time the plaintiffs divested their interest in the Airtel company amounting to $73,306,250.
Consequently the differential in the value of the shares when the plaintiffs divested their interest amounts to $28,728,125.
The plaintiffs claim against the defendants jointly and severally are as follows:
An order mandating the defendants to pay the plaintiffs the sum of $28,728,125 being the interest /profit accrued on the 9,906,250,ordinary shares sold in breach of the plaintiffs pre-emptive rights in the Airtel Company.
Secondly, that interest on same at the rate of 23% per annum from 15th July, 2003 till judgement is delivered.
Thirdly, cost of this legal action assessed at N100million.
However, in an affidavit in support of statement of defence sworn to by Airtel legal officer Kingsley Anyiam, filed on behalf of Airtel by a Lagos lawyer, Barrister C. A.Candide-Johnson SAN, the deponent averred that Airtel was not privy to the facts that led up to the dispute, as relayed by the plaintiffs in their statement of claim.
In addition Airtel is not a party to the shareholders agreement which forms the crux of this dispute, as the shareholders agreement was entered strictly among the shareholders of Airtel.
Consequently the plaintiffs statement of claim do not have any adverse reliefs against Airtel. Therefore, Airtel need not be party to this suit in order to comply with any lawful order of the court.
The court is therefore urged to dismiss this legal action against Airtel or in the alternative to strike out the name of Airtel from the suit.
