Struggling telco company 9Mobile has recorded a huge win as it battles to sustain its sale to Teleology Holdings. A Federal High Court sitting in Lagos has dismissed a law suit presented by an alleged shareholder, Spectrum Wireless Communications challenging the sale to Teleology.
First filed in January 2018, Spectrum claims to be an original investor in the telco but had been sidelined both during its debt crisis and the sale procedure initiated by the NCC. Thus in January, it filed a suit asking for a refund of its original investment worth $43 million.
It therefore prayed the court to nullify the sale procedure until that amount was paid.
However, in a recent ruling, Justice CJ Aneke of the Lagos High Court dismissed the suit, revealing that there is no direct link between Spectrum and EMTS, the Nigerian company that controlled 9Mobile until November 2018.
Rather, the court stated that Spectrum indirectly invested in 9Mobile via another company only identified as PTHNV. Thus, the court ruled, Spectrum cannot lay claims to 9Mobile or directly ask for a refund of shareholder funds directly from 9Mobile. Any dealings it has with the telco must therefore be through PTHNV.
The court ruling represents a huge win for the company which is in desperate need of one. Until now, 9Mobile had been battling court cases on two fronts. While the Spectrum suit has lingered since January 2018 and had little bearing on the 9Mobile sale, another law suit has potentials to do real damage,
In a case filed in Abuja, another set of 9Mobile investors complained that they were not carried along in the 9Mobile sale. And in their filing in the Abuja Federal Court, the shareholders say they want a refund of $43 million.
Flowing from their suit which was filed in April 2018, in October the court asked that the sale process be halted until the court case was resolved. However, that order was ignored and the sale process continued. By November, the sale was finalized and Teleology assumed ownership of the telco.
But in April 2019, the court issued an order reversing all the sale procedures up till April 2018. It was an effective blow to 9Mobile and risked jeopardizing the sale to Teleology.
Meanwhile prior to the court order, 9Mobile had been on the growth path. It gained on average 400,000 new subscribers every month since November. But that court order has produced huge uncertainty about their numbers going forward.
Nevertheless, settling the Spectrum court case is a huge win. And it allows the telco throw its full weight behind upturning the Abuja court order.
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