The last legal hurdle preventing Econet Wireless International (EWK) from rolling out its Kenyan mobile network has been removed following a High Court decision Tuesday, which ruled that the company"s 15-year GSM licence had been properly issued.
The court action was taken against Econet Wireless by two parties who were originally minority shareholders of the Econet Wireless bidding consortium.
The minority shareholders, the Kenyan Federation of Co-operatives (KNFC), and Rapsel, owned by Kenyan Manga Mubwe, petitioned the court last November to issue an injunction against Econet and the Communications Commission of Kenya (CCK) pending a judicial review of the manner in which the licence was issued.
In its ruling, the court found in Econet?s favor, agreeing with Econet that KNFC had concealed relevant agreements and correspondence between the cooperative and Econet Wireless Kenya (EWK) concerning the cooperative"s delay and inability to raise funding to finance the purchase of their allocation of shares in the consortium.
Econet Wireless Group director responsible for the Kenyan project, Zachary Wazara, says: ?This paves the way for EWK to finally proceed with our planned roll-out of the third mobile network in Kenya. This unfortunate legal action represented the last hurdle facing EWK, so we are excited to be able to get to work. We have already purchased network equipment which is now expected to arrive in Kenya shortly.? Wazara says that the problem with the two shareholders had arisen after they failed to meet their expected financial obligations as members of the EWK consortium which bid for the licence.
?They had further made misrepresentations before the court about their level of shareholding, giving the impression that they were entitled to more shares than the valid agreements between the consortium parties provided for,? he adds. ?It is a general business principle that, in order to own shares, you must put up your money. Unfortunately, since this project began, EWK never received any money from these shareholders, even for simple administrative requirements.?
Wazara said the shares in EWK that were supposed to be acquired by the KNFC and Rapsal will be sold to other interested Kenyans. ?We have received a lot of inquiries from Kenyan institutions which want these shares, and we will certainly meet our obligations under the licence agreement which stipulates that Kenyan stakeholders must hold a minimum of 30 percent of communication investments." The Kenyan project is not part of the Econet/Altech Group joint-venture.