Bharti shares fall after Econet seeks damages

Feb 23, 2012 |

Reuters

New Delhi

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Shares in Bharti Airtel Ltd fell as much as 4 per cent on Thursday after South Africa-based Econet Wireless said it is seeking at least $3.1 billion in damages in a dispute over ownership of the mobile carrier's Nigerian unit.

Bharti said it had no notice or details of any action by Econet seeking damages, but termed claims 'grossly untrue and misleading'.

"All such baseless claims are bound to be fully rejected. We have full faith in the Nigerian legal system," Bharti, which is controlled by billionaire Sunil Mittal and also nearly a third owned by Southeast Asia's top phone company SingTel, said in a statement on Wednesday.

By 0447 GMT, Bharti shares, valued at about $26 billion, were down 1.5 per cent at Rs 342.40 in a Mumbai market that was down 0.2 per cent.

Bharti paid $9 billion in 2010 to buy mobile operations of Kuwait's Zain in 15 African countries, including 65 per cent of the Nigerian unit to become the world's fifth-biggest mobile operator by subscribers.

A Nigerian court ruled on January 30 that its ownership of the unit was 'null and void' because co-founder and 5 per cent shareholder Econet had not been consulted on the transfer.

Econet claims its holding was unfairly cancelled when Zain took control in 2005. Bharti said the stake had not been cancelled but had been 'set aside' since 2006 pending resolution of the ongoing litigation.

Bharti previously said its stake in the Nigerian unit was 'completely safe' and it had appealed against the Nigerian court verdict.

Bharti had also said at the time of the 2010 deal that it had 'sufficient indemnities' in place in case of any problem with the transaction.

Nigeria is the biggest of Bharti's African markets and contributes about 9.5 per cent to Bharti's consolidated operating profit.

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