The
Founder and Executive Chairman of Econet Wireless, the first GSM operator in
Nigeria, Mr. Strive Masiyiwa, has further described how Nigerian shareholders
hijacked the company.
Masiyiwa,
in the 12th part of his Facebook series titled ‘It’s time to play by a
different (ethical) set of rules,’ on Friday, alleged that the names of the
foreign investors were illegally removed from the shares register of the
company and that efforts to seek legal redress were futile.
In an
earlier post, the industrialist recalled how the company was voted out by
Nigerian shareholders due to his refusal to pay $9m in bribes to senior
politicians.
Masiyiwa,
who has been named by the Cable News Network as one of the 50 most influential
business leaders in the world, founded Econet Wireless in Zimbabwe in 1998,
with the Nigerian subsidiary coming on board in 2001.
In his
post on Friday, which was subtitled ‘Rights, wrongs, and rule of law in
Africa,’ Masiyiwa said, “When we set up the company in Nigeria, all 22
shareholders had to sign an agreement governing our relationship, known as a
Shareholders Agreement. This was April 2001. The purpose of a Shareholders
Agreement is to protect the shareholders’ investment in the company.”
“When
the other shareholders, led by (former) Delta State Governor James Ibori,
decided to throw us out of the company, they did two things that violated the
provisions in our shareholders’ agreement, as well as Nigerian law: first, they
‘cancelled’ our shares and removed our name from the share register of the
company.
“No one
has power to do this except a court and usually only the highest court in a
country, as it is tantamount to expropriation of property rights. They did it
anyway and dared us to go to court.
“We did
and it took us exactly 10 years to reverse what they did. The judges of the
courts of Nigeria were harsh in their criticism of this decision by the other
shareholders. They called it ‘disgraceful.’ It was a form of gangsterism!”
According
to Masiyiwa, the Nigerian shareholders did not offer their foreign counterparts
the right of first refusal. Instead, he added, they offered their shares to a
third party — a company from the Middle East — without first offering them to
the foreigners as an existing shareholder.
He
added, “Of course, in their minds, it was not necessary because they had first
‘cancelled’ our shares. There’s no legal right for other shareholders to say,
‘We no longer recognise you as a shareholder,’ then hold private meetings and
make resolutions as if you don’t exist. (Protection of shareholder rights is
sacrosanct if we want to mobilise investment and see the people of our
continent prosper. Otherwise the whole investment climate is thrown up in the
air!)
“To
right these wrongs, we first had to approach the Chief Judge of the Federal
Court of Nigeria. She inexplicably refused to grant our request for nearly five
years. When she retired in 2008, we petitioned her successor, Justice Mustapha.
He granted our request and appointed a three-member international panel of
legal experts to serve on the Tribunal.
“Two of
them, including a retired judge, were Nigerian. It took him less than three
months to make the appointments, for which we have waited nearly five years!”
punch
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