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Vodacom Moves to Reopen Talks with VMobile
•Requests for equity interest By Samuel Famakinwa, 11.29.2004
South Africa's mobile telecom giant, Vodacom, which pulled out of Nigeria in controversial circumstances barely two months after officially taking over the management of former Econet Wireless Nigeria, Vee Network Limited, is now ready to reopen negotiation to acquire equity interest in the Nigerian company. This change of mind, THISDAY authoritatively reports, was said to have been communicated in a letter dated November 23 to the Chairman of VMobile, Mr. Gamaliel Onosode, by Vodacom's Group Chief Executive Officer, Mr. Alan Knott-Craig. A reliable source at Vodacom who confirmed this development weekend also told THISDAY that the South African company's pullout of Nigeria was "unfortunate", adding that "it is so bad now that our competitor, MTN Group, has now finally taken over from us by becoming the largest mobile network in Africa in terms of subscriber base, revenue and profit because of their investments in Nigeria". "When MTN declared its results penultimate week, it upset all the records we had held on to and this caused us to sit down and reassess our business plan and we have discovered that pulling out of Nigeria may have been a wrong decision", the source said. Vodacom in the new letter to VMobile is requesting for a meeting with the Board of Directors of the Nigerian company; the meeting may hold in South Africa before the end of this week subject to the approval of the boards of the two companies. THISDAY could not reach any member of the Board of Directors of VMobile last night to comment on this new development as they were said to be out of the country for a retreat. Vodacom did not only pull out of Nigeria May 2004, barely two months after officially taking over the management of Vee Network Limited, it also terminated its plan to inject about $230 million in equity investment into the company which had been re-branded Vodacom April 2004. THISDAY had exclusively reported the pullout and that the problem arose from the payment of the "brokerage or finder's" fees to three companies which had approached and convinced Akwa Ibom, Delta and Lagos state governments to make investments in the former EWN. Knott-Craig had confirmed that Vodacom's pullout from Vee Network had to do with "good corporate governance and trust." He also said that during the few weeks Vodacom managed the Nigerian company, it was apparent that some unknown persons within or close to Vee Network, were compromising its ability to properly exercise control over it. Although, he admitted the exit was a loss to Vodacom, Knott-Craig affirmed that Vodacom had to take a stand to ensure that it maintained sound corporate governance saying that the brokerage fees paid by Vee Network affected their confidence in the company and "was to ultimately lead to our withdrawal."
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