Crimes Commission Probes Vodacom Pull-out
...SEC, NCC too
From Kunle Aderinokun in Abuja
The Economic and Finan-cial Crimes Commission (EFCC) yesterday in Abuja announced that it has opened investigations into the circumstances surrounding the sudden withdrawal of Vodacom (Pty) of South Africa from V-Mobile (fomerly Vee-Networks Limited, also formerly Econet Wireless Nigeria).
Vodacom had terminated a five-year management deal with V-Mobile following the payment of five per cent brokerage fees to three Nigerian firms, Oceanic Securities Limited, Bromley Assets Management and Empee Ventures.
The three firms had brought equity investments from respectively Lagos, Delta and Akwa Ibom States.
Vodacom said the brokerage payments, despite its objections, not only undermined good corporate governance practices, but breached trust.
The EFCC yesterday, however, vowed that it would determine the financial loses, if any, incurred in the process of the transaction and recover same.
Chairman of the EFCC, Mallam Nuhu Ribadu, disclosed in a statement that the commission would conduct a probe to determine the extent to which corporate governance and transparency have been compromised in the relationship between V-Mobile and Vodacom as well as "establish whether or not the laws of the Federal Republic of Nigeria as contained in the Companies and Allied Matters Act have been complied with."
The Commission further disclosed that it would probe all the issues involved in the legal tussle between V-Mobile and its former founding partner, Econet Wireless International (EWI) as well as the role played by Nigerian regulatory agencies, the Nigerian Communications Commission (NCC) and the Securities and Exchange Commission (SEC).
Ribadu, stated that the investigation includes "the determination of the implications of the withdrawal and legal tussle on Foreign Direct Investment (FDI)."
The EFCC would also investigate whether the three companies, Oceanic Securities, Bromley Asset Management and Empee Ventures are duly licensed to offer the services for which they were paid brokerage fees.
The EFCC would further "investigate the appropriateness or otherwise of the brokerage fees paid to the three companies with the laws of the Federal Republic of Nigeria; investigate the roles of the regulatory agencies such as Nigeria Communications Commission (NCC) and the Securities and Exchange Commission (SEC) in the Equity Investment Transaction and to determine if Nigeria court sanctions were obtained."
The statement also pointed out that the "EFCC investigation is also to determine the financial loses (if any) and recover same; invite and ensure the attendance/appearance of any person to assist in the investigation as well as liaise with the relevant bodies either public or private including the Ministry of Communications to make and implement its recommendations."
Vodacom pulled out of Nigeria barely two months after officially taking over the management of V-Mobile.
It also terminated its plan to inject about $200 million in equity investment and operating loan into the Nigerian company.
Vodacom's decision to pull out followed "brokerage" payments on the investments of three state governments, namely Lagos, Delta and Akwa Ibom.
The brokerage fees for Lagos State was made to Oceanic International Bank Limited through its Oceanic Securities Limited, Delta State payment was made to Bromley Assets Management Limited, while Akwa Ibom's payment was made to Empee Ventures Limited.
Two of Vodacom's Group executives in South Africa, Mr. Andrew Mthembu, deputy chief executive officer, and Mr. Robert Pasley, corporate strategy director, also resigned their positions as a result of the transaction.
The problem arose from the payment of the "brokerage or finder's" fees to Empee Ventures Limited, Bromley Asset Management Ltd and Oceanic Securities Limited, companies which had approached Akwa Ibom, Delta and Lagos state governments respectively and convinced them to make investments in the former EWN. The companies had demanded 10 per cent of the investments made by the State Governments.
Oceanic Bank and Bromley were paid N71.4 million each through a Universal Trust Bank cheque and Intercontinental Bank cheque respectively while Empee was paid a total of N229 million through Lead Bank and National Bank of Nigeria cheques.
Although the money was returned at the insistence of Vodacom, the South African company said the damage had been done and that the Board of the Nigerian company could no longer be trusted.
EWI had earlier alleged these payments were bribes. EWI chief executive officer, Mr. Strive Masiyiwa, had also alleged that his "refusal to pay the commissions was responsible for the breakdown in the relationship with some of his Nigerian partners."
A legal process was later initiated to determine whether the fees were bribe or not. But a day before former EWN signed its Management and Technical Agreement with Vodacom, its board quickly paid the remaining 5 per cent to the companies even while the court was yet to decide on the matter.
Although Vodacom conceded that it had no proof the brokerage payment was corruption, it however said it undermined good corporate governance practices.
EWN which changed its name to Vee Networks Ltd following the management agreement with Vodacom made another name change to V-Mobile after the South African company had terminated the deal.
|
