A fierce shareholders’ battle is looming in Uganda’s Warid Telecom that is bound to bring into the open who else holds a stake in the company besides the ruling family of the United Arab Emirates.
The major shareholder, the Dhabi Group, consists of the UAE ruling family and several other Dubai businessmen that have yet to be identified. However, a minority shareholder has sued the firm, allegedly over unpaid shares.
Ugandan businessman Abdul Rahman Elamin has sued the Abu Dhabi royal family’s business entities over the three per cent shares allotted to him in 2007.
Top industry sources told Sunday Monitor that the shareholders’ dispute was bound to intensify, with reports indicating that South Africa’s giant Vodacom PTY could be interested in buying the Ugandan registered firm.
However, responding to this newspaper’s inquiry, Vodacom South Africa’s spokesperson, Mr Richard Boorman, said on Monday: “We regularly review opportunities that come up in sub-Saharan Africa, but we can’t comment on any specific company or country.”
According to a top company official at Warid Uganda, a decision to sell the firm, the third largest network in the country, behind Airtel and market leader MTN, was reached by the majority shareholders, the Dhabi Group.
The source revealed that the plans were “in the advanced stages”.
Warid has been embroiled in a dispute with Mr Abdul Rahman, who, according to documents obtained by this newspaper, was allotted $1.5m in shares now valued at over $ 3.7m.
According to a source, the telecoms regulator, the Uganda Communications Commission has since “taken a keen interest” in the would-be acquisition of Warid Uganda.
However, Warid Uganda has since last week declined to comment on the court case. Top executives have insisted the dispute was between its main shareholders and Mr Abdul Rahman.
“We as operating teams neither have a view nor would like to comment on this,” one of them said.
Court documents indicate that on July 15, 2006, Mr Abdul Rahman arranged and facilitated a “high-level investment meeting” between the Dhabi Group and President Museveni.
Contrary to that position, Warid Telecom has since filed a defence at the High Court, stating Mr Abdul Rahman never arranged or facilitated the said “high- level meeting” with Mr Museveni.
They also insist that Mr Abdul Rahman was duly remunerated for any services that he may have provided.
The Sunday Monitor has obtained a copy of the minutes of the August 11, 2006 meeting between Mr Museveni, the UAE ruling family and other investors. In attendance was also then State Minister for Finance (Planning) Omwony Ojwok and his Investment counterpart at the time, Prof. Semakula Kiwanuka.
During the meeting, Mr Museveni was reportedly informed that the UAE ruling family and the Dhabi Group had shown interest in investing in Uganda.
The minutes indicate they told Mr Museveni that they were interested in the telecom industry, banking, real estate development, hospitality, manufacturing and oil drilling.
Mr Museveni reportedly agreed to the group’s investment interests and asked them to market Uganda to more would-be investors in the UAE.
After the meeting with Mr Museveni, Mr Abdul Rahman was duly appointed Warid’s resident coordinator and given the responsibility of pursuing the licensing of the communication component of the investor’s interest.
On November 22, 2007, Mr Abdul Rahman was notified he had been granted three per cent shareholding in Warid Telecom. The share value has since accrued interest to now $3.7m. “Further to our conversation dated November 22, 2007 and as instructed by our group CEO, Mr Bashir Ahmed Tahir, we confirm on behalf of Warid Telecom international LLC that you hold a beneficial interest of three per cent shares in Warid Telecom Uganda Limited,” the Dhabi Group’s finance manager, Mr Manocher Jamal, wrote in an email titled “Equity Confirmation”.
In November 2009, the Essar Group of India bought a 51 per cent stake in Warid Telecom. The deal is said to have cost about $318m (Shs842b). The total cost is, however, attributed to Warid Uganda and another firm in Congo Brazzaville.