Court halts planned sale of 9Mobile, as shareholders demand $43.33m refund

The Federal High Court in Abuja has halted the plan to sell the
telecommunication firm, Etisalat, now called 9Mobile.

This followed an application by some aggrieved shareholders who
are demanding that the planned sales should not be allowed to take
place until they are paid the sum of $43.33m which they allegedly
invested in the troubled company.

Justice Binta Nyako had, on Tuesday, granted the interim
restraining order following an ex parte application moved during
the proceedings by the plaintiffs’ lawyer, Mahmud Magaji (SAN).

The judge ruled that “an order is made for the maintenance of
status quo as at Tuesday.”

She, however, noted that “the defendants ought to be heard” and
therefore ordered the service of the plaintiffs’ processes on
them.

The defendants sued in the suit are Karlington
Telecommunications Ltd, Premium Telecommunications Holdings NV,
First Bank of Nigeria Plc, Central Bank of Nigeria, Etisalat
International Nigeria Ltd (now 9mobile) and the Nigerian
Communications Commission.

The suit marked FHC/ABJ/CR/288/2018 was filed on March 22, 2018
by some aggrieved Afdin Ventures Limited and Dirbia Nigeria Limited
who claimed to have shares in Etisalat.

They claimed to be major investors in the company but left out
in the firm’s decision making.

In their main suit, the plaintiffs asked the court to, among
others, declare that the planned sale of Etisalat to Smile.Com and
Glo Network, without paying the them the money with which they
bought the shares, is unlawful.

They also urged the court to order the 1st, 2nd, 3rd and 5th
defendants to refund to the plaintiffs a total of $43,330,950 with
which they bought their 4303395 shares at $10 per share.

The plaintiffs equally prayed the court to award N1bn in general
damages against the defendants and in their favour.

The plaintiffs said, in a statement of claim, that they bought
shares in Etisalat from the 1st and 2nd defendants (Karlington Ltd
and Premium Holdings) through “a private placement memorandum in
which the 3rd defendant (First Bank) served as a custodian of the
plaintiffs’ share certificate.”

They said while the 1st plaintiff (Afdin Ventures) “bought
1,300,391 Class A Shares at $13,003,910,” which it paid for on
August 14, 2009, the 2nd plaintiff (Dirbia Ltd) acquired 3,300,004
Class A shares at $30,030,040, for which it made payment on
September 3, 2009.

The plaintiffs said they paid for the shares through the 1st and
2nd defendants’ First Bank accounts.

In a supporting affidavit, Sani Ibrahim, the General Manager of
the 1st plaintiff and a director in the 2nd plaintiff, stated that
problem with Etisalat resulted from the mismanagement of its
funds.

He said the plaintiffs’ grouse arose from not only the firm’s
mismanagement, but also from its inability to declare dividends
from 2009 till date and the move by the defendants to conduct a
clandestine sale of the company at the detriment of the
plaintiffs.

Ibrahim stated that “in 2015, the 1st, 2nd and 5th defendants
took several loans from 13 Nigerian banks with a view to expanding
and boosting their telecommunication business, but that the money
was not properly utilised, leading to heavy indebtedness on the
1st, 2nd and 5th defendants.”

He added that, owing to the resultant heavy indebtedness, the
1st and 2nd defendants “rebranded the 5th defendant (Etisalat) and
changed its name to 9Mobile with a view to selling it off and
obtaining money to pay its numerous debts.

Ibrahim stated, “The 1st, 2nd, 3rd and 5th defendants have
failed to declare dividends on the shares of the plaintiffs since
2009 till date.

“The 1st, 2nd, 3rd and 5th defendants have completed arrangement
to sell the rebranded 9Mobile to Smile.Com and Glo Network without
the knowledge of the plaintiffs, who are its major investors.

“If not restrained, the 1st, 2nd, 3rd and 5th defendants will
sell Etisalat International (also known as 9Mobile) and disappear
with the plaintiffs’ investment.”

The Federal High Court in Abuja has halted the plan to sell the
telecommunication firm, Etisalat, now called 9Mobile.

This followed an application by some aggrieved shareholders who
are demanding that the planned sales should not be allowed to take
place until they are paid the sum of $43.33m which they allegedly
invested in the troubled company.

Justice Binta Nyako had, on Tuesday, granted the interim
restraining order following an ex parte application moved during
the proceedings by the plaintiffs’ lawyer, Mahmud Magaji (SAN).

The judge ruled that “an order is made for the maintenance of
status quo as at Tuesday.”

She, however, noted that “the defendants ought to be heard” and
therefore ordered the service of the plaintiffs’ processes on
them.

The defendants sued in the suit are Karlington
Telecommunications Ltd, Premium Telecommunications Holdings NV,
First Bank of Nigeria Plc, Central Bank of Nigeria, Etisalat
International Nigeria Ltd (now 9mobile) and the Nigerian
Communications Commission.

The suit marked FHC/ABJ/CR/288/2018 was filed on March 22, 2018
by some aggrieved Afdin Ventures Limited and Dirbia Nigeria Limited
who claimed to have shares in Etisalat.

They claimed to be major investors in the company but left out
in the firm’s decision making.

In their main suit, the plaintiffs asked the court to, among
others, declare that the planned sale of Etisalat to Smile.Com and
Glo Network, without paying the them the money with which they
bought the shares, is unlawful.

They also urged the court to order the 1st, 2nd, 3rd and 5th
defendants to refund to the plaintiffs a total of $43,330,950 with
which they bought their 4303395 shares at $10 per share.

The plaintiffs equally prayed the court to award N1bn in general
damages against the defendants and in their favour.

The plaintiffs said, in a statement of claim, that they bought
shares in Etisalat from the 1st and 2nd defendants (Karlington Ltd
and Premium Holdings) through “a private placement memorandum in
which the 3rd defendant (First Bank) served as a custodian of the
plaintiffs’ share certificate.”

They said while the 1st plaintiff (Afdin Ventures) “bought
1,300,391 Class A Shares at $13,003,910,” which it paid for on
August 14, 2009, the 2nd plaintiff (Dirbia Ltd) acquired 3,300,004
Class A shares at $30,030,040, for which it made payment on
September 3, 2009.

The plaintiffs said they paid for the shares through the 1st and
2nd defendants’ First Bank accounts.

In a supporting affidavit, Sani Ibrahim, the General Manager of
the 1st plaintiff and a director in the 2nd plaintiff, stated that
problem with Etisalat resulted from the mismanagement of its
funds.

He said the plaintiffs’ grouse arose from not only the firm’s
mismanagement, but also from its inability to declare dividends
from 2009 till date and the move by the defendants to conduct a
clandestine sale of the company at the detriment of the
plaintiffs.

Ibrahim stated that “in 2015, the 1st, 2nd and 5th defendants
took several loans from 13 Nigerian banks with a view to expanding
and boosting their telecommunication business, but that the money
was not properly utilised, leading to heavy indebtedness on the
1st, 2nd and 5th defendants.”

He added that, owing to the resultant heavy indebtedness, the
1st and 2nd defendants “rebranded the 5th defendant (Etisalat) and
changed its name to 9Mobile with a view to selling it off and
obtaining money to pay its numerous debts.

Ibrahim stated, “The 1st, 2nd, 3rd and 5th defendants have
failed to declare dividends on the shares of the plaintiffs since
2009 till date.

“The 1st, 2nd, 3rd and 5th defendants have completed arrangement
to sell the rebranded 9Mobile to Smile.Com and Glo Network without
the knowledge of the plaintiffs, who are its major investors.

“If not restrained, the 1st, 2nd, 3rd and 5th defendants will
sell Etisalat International (also known as 9Mobile) and disappear
with the plaintiffs’ investment.”