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Last Updated: Tuesday, 4 November, 2003, 11:31 GMT
Nigeria phone row goes to court
Vodashop, Vodacom
South Africa's Vodacom is expanding its African empire
A bitter dispute among shareholders in one of Nigeria's biggest mobile phone companies has been taken to a United Nations court.

The move is aimed at stopping South Africa's Vodacom from taking control of Econet Wireless Nigeria (EWN), the second largest operator in Nigeria.

The case has been brought by Econet Wireless International (EWI) which owns 5% of EWN.

EWI has had management control of EWN ever since the Nigerian firm won one of the country's first mobile phone licences three years ago.

"We are a major stakeholder in this business, we built it, it carries our brand name," EWI's chairman and chief executive Strive Masiyiwa told BBC World Business Report.

Arbitration

Vodacom offered $230m (137m) to take a majority stake in the Nigerian business and the offer was accepted at a board meeting on behalf of shareholders.

On Monday, Mr Masiyiwa told an analyst meeting that by accepting Vodacom's offer, the Nigerian shareholders are reneging on an agreement to let his company increase its stake to 33% through a $150m equity injection.

Mr Masiyiwa has applied for an injunction in Nigeria to stop the Vodacom deal and has gone to the United Nations Commission on International Trade in the Hague for arbitration.

The UN court got involved after Nigeria's High Court failed to appoint an arbitration panel within a stipulated 60-day period.

Breach of contract?

EWI are seeking an order to declare the board meeting where the Vodacom offer was accepted illegal.

They are also pursuing Vodacom for damages, arguing they induced EWN shareholders to breach their contract with EWI.

"We have basically sued Vodacom for inducement to breach of contract," said Mr Masiyiwa.

The management of EWN has denied that there was any breach of contract and said they expected the Vodacom deal to go through.

Vodacom has refused to comment on the dispute.


WATCH AND LISTEN
EWI's chairman and chief executive Strive Masiyiwa
"We have basically sued Vodacom for inducement to breach of contract."



SEE ALSO:
Nigeria mobile boom boosts MTN
27 Nov 02  |  Business
Vodacom rolls out DR Congo network
27 May 02  |  Business


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