The Supreme Court will have to intervene in the matter between Broad Communications Limited and O & O Networks Limited, a company now owned by Ecobank Nigeria Limited.
O & O Networks Limited was a special purpose vehicle created by the defunct Oceanic Bank International Limited, which was acquired by Ecobank Transnational Incorporated (ETI) in 2011.
The firm invested in Airtel Networks Limited through Econet Wireless Nigeria and thereafter sold the shares to the Delta State Government for N22.5 billion (approximately $62.5 million in August 2018.
But one of the founding shareholders of the telco, Mr Oba Otudeko, and his company, Broad Communications, dragged O & O Networks to court, claiming that it was wrong for the defendant to sell the shares to the Delta State government without first offering them to existing shareholders.
In the suit filed in September 2018 for an interlocutory injunction, Broad Communications Ltd requested the Federal High Court of Nigeria to grant an order directing O&O Networks to place the N22.5 billion and an amount into an escrow account in the name of the Chief Registrar of the Federal High Court, pending the final determination of the substantive claim.
It was argued that based on the shareholders’ agreement, it was mandatory for such a step to be taken before offering the equities to fresh investors.
Otudeko and Broad Communications urged the court to declare the sale of the shares to the Delta State government as illegal because it was purely a breach of the binding agreement, especially Clause 17.2.1 of the shareholders’ agreement.
However, Ecobank defended its reason for selling the shares to the state government, emphasising that the transaction was backed by an order of the Federal High Court on June 7, 2018.
But when a judgement was made on the matter on March 7, 2019, the interlocutory application filed by the plaintiffs was granted by the court.
O & O Networks subsequently filed an appeal and an application to stay of execution of the ruling and on Tuesday, November 24, 2020, the appeals were dismissed by the appellate court.
Reacting, O & O Networks Limited described the appeal court judgment as “unfavourable,” stating that “a further appeal against the judgments, alongside motions to stay execution of the judgments have been filed to the Supreme Court.”
“Our external solicitors have filed notices of appeal against the judgments, alongside motions to stay execution of the judgments. Parties to the appeals, including Broad Communications Limited, have been served with the court papers,” the firm said in the statement.