Econet Wireless is seeking at least $3,1 billion in damages from Bharti Airtel in a dispute over ownership of Airtel Nigeria, according to a suit Econet filed on Wednesday.
Bharti acquired the African operations of Kuwaiti company Zain in 2010, including 65% of Zain Nigeria renamed Airtel Nigeria but a Nigerian court ruled on January 30 that its ownership of the unit was null and void because co-founder and 5% shareholder Econet had not been consulted on the transfer.
Econet claims its stake was unfairly cancelled when Zain took control in 2005, so any decision made since then without it, including the transfer to Bharti from Zain, is void. The Nigerian court upheld that claim. Bharti, the worlds fifth-biggest mobile phone carrier by subscribers, said on February 8 its stake in the Nigerian unit was completely safe and it had appealed against the verdict.
A Bharti spokesman said the company had not been informed of any lawsuit.
Econet has yet to put forward its claim for damages to the arbitral tribunal, he said in a statement.
The document Econet filed with the court stated: The claim for damages and equitable compensation against the applicant and some of the respondents might be in excess of $3 billion.
The above estimated damages might also be in addition to a claim for $100 million received by the applicant as fees for the management of VNL (Vee Networks Ltd, a former name of Airtel) for a period of six years, which sum should have accrued.
Bhartis spokesman said the Econet stake had not been cancelled, but had been set aside pending final resolution of litigation on the matter.
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Nigeria contributes about 9,5% to Bhartis consolidated operational profits, the company said. Shares in Bharti Airtel Ltd fell as much as 4% after Econet said they were seeking damages in a dispute over ownership of the leading Indian mobile carriers Nigerian unit.
Bharti said they had no notice or details of any action by Econet seeking damages, but termed claims grossly untrue and misleading.
. . . All such baseless claims are bound to be fully rejected. We have full faith in the Nigerian legal system, Bharti, controlled by billionaire Sunil Mittal and also nearly a third owned by South-east Asias top phone company SingTel, said in a statement on Wednesday.
On Wednesday, Bharti shares, valued at about $26 billion, were down 1,5% at 342,40 rupees in a Mumbai market that was down 0,2%.
Bharti paid $9 billion in 2010 to buy mobile operations of Kuwaits Zain in 15 African countries, including 65% of the Nigerian unit to become the worlds fifth-biggest mobile operator by subscribers.
A Nigerian court ruled on January 30 its ownership of the unit was null and void because co-founder and 5% shareholder Econet had not been consulted on the transfer. Reuters
