Econet, Altech in court battle

By Iain Scott, ITWeb group consulting editor

Johannesburg, 05 Aug 2005

Econet Wireless Group claims that Altech`s court bid to wind up Econet Wireless Global is aimed at scuppering a hearing into an alleged racist statement.

JSE-listed Altech - Allied Technology Group - said in a statement to shareholders yesterday that it had launched an application in the High Court of Botswana for the winding up of Econet Wireless Global (EWG), also known as AEW, a joint venture with Econet.

"The reason for the application is that the relationship between Altech and the other shareholders of EWG (TSMI shareholders) has irretrievably broken down, which has resulted in EWG being unable to conduct its business in the manner contemplated by EWG`s shareholders," Altech said, without elaborating further.

It said that should the court not grant a winding-up order, Altech had also applied for "alternative relief that an order be granted to the effect that an order be granted that Altech either acquire from or dispose of its investment to the TSMI shareholders for a consideration of $100 million".

However, the company is declining to comment further on the issue, with a spokesman saying that Altech is bound by a confidentiality clause in the shareholders` agreement.

Econet says it will oppose the bid.

Irreparable damage

"While we have not yet seen the specific papers filed by Altech, Econet would like to make it clear that the Econet Wireless Group will vigorously contest any attempt to wind up its subsidiary AEW, as we do not consider such a remedy necessary given that Altech invested $70 million into an existing company in December 2004," the group says in an official statement.

It adds that the two parties already agreed to the alternative remedy in June, when it became clear that their relationship had broken down "irreparably".

"Econet, through its financial advisers, has already formally submitted an offer to Altech to buy out their stake in AEW while at the same time making it abundantly clear to them that Econet has no intention to sell its stake."

According to Econet, the court application comes a day after Econet filed papers to defend the right of CEO Strive Masiyiwa, to continue with an independent inquiry into alleged racist remarks by a senior executive appointed to EWG by Altech.

"Altech has filed papers in a bid to prevent the hearing from going ahead. It is our view that its High Court application in Botswana is also designed to prevent this hearing from going ahead as the issue of one party buying the other had already been resolved two months ago."

Masiyiwa could not be reached for further comment by the time of writing.

The Altech share shed 113c to close at 4 412c on the JSE yesterday. It was trading another 12c down at 4 400c this morning.