United Capital Trustees Limited, the receiver-manager appointed by the consortium of 13 banks which lent 9mobile (formerly Etisalat Nigeria) $1.2 billion, has said it will appeal the ruling of the Federal High Court in Lagos which nullified the appointment of an interim board for the telecoms firm.
Justice Ibrahim Buba of the Federal High Court had made the order last Friday following an application by Spectrum Wireless Communication Ltd, which said it invested $35 million in 2009 in Emerging Markets Telecommunications Service (EMTS), one the shareholders of 9mobile (formerly Etisalat).
The judge ruled: “An order is hereby granted discharging the ex-parte order made by this court in this suit in favour of the respondent (United Capital) on the 3rd day of July 2017.
“The order made pursuant to a motion ex-parte dated 3rd day of July 2017 was a nullity, made without jurisdiction and obtained by misrepresentation of the facts. Same be and is hereby discharged and vacated as prayed.
“The motion for stay is struck out having set aside the order. The respondent shall reverse all steps taken by it since the order was a nullity.”
Justice Buba granted the application last Friday on the grounds that it was granted based on a misrepresentation of facts made available to the court at the time.
The order effectively nullified the appointments of Dr. Joseph Nnana of the Central Bank of Nigeria (CBN) as chairman, Mr. Boye Olusanya as managing director, Mrs. Funke Ighodaro as chief financial officer, Mr. Oluseyi Bickersthet and Mr. Ken Igbokwe as members of the interim board of 9mobile.
The nullification followed the dismissal by Justice Buba of the preliminary objection filed by United Capital in response to the application by Spectrum Wireless.
Spectrum Wireless claimed that the ex-parte order was granted to United Capital through misrepresentation of the facts that alienated its interests in EMTS.
Spectrum Wireless, which claims to hold 17.5 per cent of the shares in EMTS, is demanding for a return of its investment worth over $35 million, before the telecoms company can be sold.
The management of Spectrum Wireless, which spoke to the media yesterday in Lagos, also claimed that since it invested the $35 million in 9mobile in 2009, no returns had been made to it.
It said the planned sale of 9mobile must stop until every kobo of its investment has been paid.
The solicitors to Spectrum Wireless warned that by virtue of the said judgment, the positions of Nnanna, Bickersteth, Igbokwe, Ighodaro and Olusanya, as security trustee nominees of the board of EMTS had been nullified and the order appointing them vacated.
The solicitors, J.A. Achimogu and Co and Dr. Reuben Atabo and Co., warned that any institution or company that transacts business for the purpose of sale or acquisition of EMTS or 9mobile, does so at his or her own risk.
Mr. Atabo said its client – Spectrum Wireless and three others – invested about $100 million in Etisalat in 2009, which the firm used to expand its infrastructure base, “and as we speak, no return on investment has come to anyone of us”.
He expressed his displeasure that the protracted $1.2 billion syndicated loan facilitated by United Capital for Etisalat was shrouded in secrecy, stressing that some investors were not regarded in the entire process.
“When the problem arose, most of the directors abandoned the telecommunications firm because they never put their monies. It got to the stage that no audited account was prepared for us to see. Everything about the loan and Etisalat was shrouded in secrecy.
“Now, they are bringing in new cronies to get 9mobile again. I think Etisalat Nigeria’s board should be seriously investigated,” Atabo said.
On whether Spectrum Wireless had intimated the NCC on the matter, Atabo said: “We wrote several letters to the commission on the matter, but they claimed they were investigating and nothing has come out from the investigation before all this now came to the fore last Friday.”
He maintained that Spectrum Wireless wanted its money back, as “it was not only the banks that invested in Etisalat”.
“Our investment should be adequately recognised. No kobo has been returned to Spectrum Wireless since 2009,” he maintained.
He said the action of United Capital, which is fronting for the lending banks, did not take into consideration other stakeholders in EMTS, especially, the non-bank investors.
According to the solicitors, the decision of the court would paved the way for more inclusive discussions with all the shareholders and investors of EMTS to reach a broad-based resolution on the future of the company that would give due consideration to the interests of all stakeholders.
But in reaction to the court judgment, the United Capital official said the judgment was based on misrepresentation given by Spectrum Wireless and on “flawed technicalities”, affirming that it would appeal the judgment.
He disclosed that Spectrum Wireless comprises a group that claims it has shareholders that invested through a series of other proxies in EMTS, making its claim on the ownership of 9mobile flawed.
“The names of the owners of Spectrum Wireless do not feature in the shareholding structure of 9mobile, be it at the Corporate Affairs Commission (CAC) or in the books of the company.
“Their claim has no locus, as they are four people removed from the shareholders of the company, so how can they lay a claim on 9mobile? They should not even have gone to court. But we are confident that the issue will be resolved on appeal,” he said.
He added that the ruling of the Federal High Court would not stop the sale of 9mobile and the five bidders that had been prequalified to submit their final bids will be notified accordingly.
The interim board of 9mobile, which has the support of the CBN and the Nigerian Communications Commission (NCC), had received bids from 16 bidders, which were eventually pruned down to five, in its intended sale of the company.
NCC last week gave the deadline for the submission of final bids from the five bidders as January 16.
EMTS, the Nigerian shareholders of 9mobile which owns 15 per cent of the company, secured a telecommunications licence from the NCC in 2007 and invited Abu-Dhabi-based Emirates Telecoms Group Company (Etisalat Group) andMubadala Development Company to acquire shares in the Nigerian firm.
But the six Mubadala and Etisalat Group-appointed non-executive directors, all nationals of the United Arab Emirates, resigned last June, following the debt default by their then Nigerian subsidiary and Etisalat Group’s reporting disclosure on the Abu Dhabi Stock Exchange that it was transferring 45 per cent of its stake and 25 per cent of its preference shares in its Nigerian subsidiary to United Capital.
9mobile at the time had blamed the economic downturn of 2015-2016 and naira devaluation, which negatively impacted on the dollar-denominated component of the loan, for its inability to repay the banks.
However, United Capital was prevented by the CBN and NCC from taking over the teleco and instead collaborated with the banks to appoint the interim board, after which Barclays Africa was appointed to handle the sale of shares relinquished by Etisalat Group.