Justice Ibrahim Buba of the Federal High Court in Lagos has nullified the appointment of an interim board for Emerging Markets Telecommunications Service (EMTS), owners of Etisalat.
Justice Buba nullified the appointment of an interim board after hearing an application brought before him by Spectrum Wireless Communication Ltd, which invested $35million in 2009 in EMTS/Etisalat, the fourth largest telecommunications service operator in Nigeria.
The judge in his ruling held, “An order is hereby granted discharging the ex-parte order made by this court in this suit in favour of the respondent on the 3rd day of July, 2017.
“The order made pursuant to motion ex-parte dated 3rd day of July, 2017 was a nullity, made without jurisdiction and obtained by misrepresentation of facts. Same 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.”
The court order specifically nullifies the appointment 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. Seyi Bickersthet and Mr. Ken Igbokwe as being on the board of EMTS.
Justice Buba had earlier dismissed the preliminary objection filed by United Capital Trustees Ltd in response to the application by Spectrum Wireless, a shareholder of EMTS.
In its arguments before the court, Spectrum Wireless had submitted that the order was obtained by misrepresentation of facts that alienated its interests in the company.
The interim board of EMTS, which has the support of the Central Bank of Nigeria (CBN) and the Nigerian Communications Commission (NCC), had received bids from about five bidders in its intended sale of the company.
The sale should have been concluded last year December 31, but was recently rescheduled for January 16.
The Solicitors warned that any institution or company who transacts business for the purpose of sale or acquisition of EMTS or 9Mobile does so at his or her own risk.
EMTS, popularly known as Etisalat, secured a telecommunications licensee in 2007. It has equity participation by local and foreign investors and in 2011, secured facilities from a consortium of domestic banks under the auspices of United Capital Trustees Ltd (United Capital) to the tune of N115.6billion and $235million.
EMTS’ alleged default to service the facilities elicited recovery action by United Capital.
The sensitivities of such action to the health of the Nigerian financial system, the telecommunications sector and the economy in general, precipitated tempered action with the consent of the Central Bank of Nigeria (CBN) and the Nigerian Communications Commission (NCC) to avert possible adverse impact.
There was anxiety in some quarters and fears that such action smacked of a takeover of the company by the government, a move that could bring undue preference to the company, disrupt or distort competition that has been instrumental to the vibrancy of the telecommunications sector.
Following the exit of Etisalat and its directors in unclear circumstances in June 2017 from EMTS, United Capital initiated action and obtained an ex-parte order of July 3, 2017 to appoint a Transitional Board to superintend over the affairs of the company.
The Transitional Board rebranded the company as 9mobile and announced a bid for the sale of the company to interested investors.
The bid was intended to be concluded with handover of EMTS to the preferred or successful bidder by 31 December, 2017 but has since been extended to January 16, 2018.
Concerned that United Capital’s action did not take their stake in EMTS into consideration, other (non-bank) investors in EMTS led by Spectrum Wireless, approached the court last December 2017 to challenge the ex-parte order granted in favour of United Capital.
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.
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