Econet wireless has filed a suit requesting for damages from Bharti Airtel to the tune of $3.1 billion. Econet has been challenging Bharti's Airtel ownership of Airtel Nigeria claiming that its 5 per cent stake, as a co-founder, was unfairly cancelled when Zain took control, so any decision made since then without it, including the transfer to Bharti, is void. This claim has been upheld by a court ruling on January 30 which declared Bharti Airtel's ownership of its subsidiary Airtel Nigeria as "null and void".
Bharti has since appealed the court ruling and is confident its stake in its Nigerian subsidiary which contributes about 9.5 per cent to its consolidated operational profits is "completely safe".
The document filed to the court, however read in part "The claim for damages and equitable compensation against the Applicant and some of the Respondents might be in excess of $3 Billion," the document filed to the court said.
"The above estimated damages might also be in addition to a claim for $100 Million received by the Applicant as fees for the management of VNL (Vee Networks Limited, a former name of Airtel) for a period of 6 years which sum should have accrued."
The dispute between the two companies had been ongoing since 2003 when the same assets were first sold to Vee Networks. The legal case was inherited by Bharti Airtel as part of a $9 billion acquisition of Zain's Africa operations in 2010, including 65 percent of Zain Nigeria. Airtel Nigeria contributes about 9.5 per cent to Bharti's consolidated operational profits, the company says.-daily times
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