Altech wants Econet wound up

5 Aug 2005

South Africa’s Allied Technologies (Altech) has made an application to the High Court of Botswana to wind up cell phone operator Econet Wireless Group (EWG), whose management is embroiled in a shareholder dispute in Nigeria. Altech, which bought 50% plus one share of EWG for USD70 million last November, is also attempting to either buy out Econet’s original shareholders, including the family of its enigmatic CEO Strive Masiyiwa, or sell its own stake to them for USD100 million if its application to wind up the firm fails. Altech explained its reasons for submitting the application in a press statement. ‘The reason for the application is that the relationship between Altech and the other shareholders of EWG has irretrievably broken down, which has resulted in EWG being unable to conduct its business in the manner contemplated by EWG’s shareholders,’ the company said.

Econet Wireless International (EWI) is locked in a battle for control of Nigerian cellco Vee-Networks. In mid-June the company threatened court action against its fellow investors if they attempted to sell their shares in the operator to Vodacom and Virgin Mobile. Earlier the same month, Vodacom and Virgin Mobile announced they were planning to make a joint bid for a controlling stake in Vee Networks (which trades under the V-Mobile brand name) and said their bid had the backing of the company’s board. However, the buyout bid has been stalled and put on hold until a legal claim by former V-Mobile shareholder and manager EWI is resolved. EWI was forced to give up its shareholding in V-Mobile in early 2004 and saw its management contract for the cellco handed to Vodacom amid claims that its business dealings were not transparent. An international tribunal has since referred the case to a new panel to be appointed by a Nigerian court and EWI has publicly said that any V-Mobile investor attempting to sell their stake in the cellco will be cited for contempt of court.

South Africa, Econet Wireless Group