In an attempt to absolve themselves of criminal and civil liability for the non-payment of a $1.2 billion loan taken from 13 Nigerian banks, the directors of Etisalat Nigeria, save for its chairman, Hakeem Belo-Osagie, have resigned en masse from the seven-man board of the network operator.
According to sources close to Etisalat, the six Mubadala and Etisalat Group-appointed Non-executive Directors (NEDs), all nationals of the United Arab Emirates, resigned last week, following Emirates Telecoms Group Company’s (Etisalat Group) reporting disclosure on the Abu Dhabi Stock Exchange that it was transferring 45 per cent of its stake and 25 per cent of its preference shares in its Nigerian subsidiary to United Capital Trustees Limited, the legal representative of the lending banks.
Other shareholders of Etisalat Nigeria include Mubadala Development Company with a 40 per cent stake and Emerging Markets Telecommunications Services (EMTS), representing the Nigerian shareholders, with 15 per cent.
The consortium of banks had threatened to takeover the operations of the telecoms company, unless it repaid the loan in full.
One source who was aware of the directors’ resignation informed THISDAY that they stepped down from the board intentionally in an attempt to exonerate themselves from the liability of the debt default that has enveloped Etisalat Nigeria, but said the banks will not allow them to go scot-free.
He explained that what the directors forgot is that they had used a Dutch-registered company, of which they are also the directors, to guaranty the loans from the banks, and as such cannot run away from their obligations to their Nigerian lenders.
“Yes, they resigned because they are trying to absolve themselves of the loans they have left behind.
“But they cannot run away because they had used a company registered in the Netherlands where they are directors to guaranty the loans, so they will still be held liable should Etisalat Nigeria fail to repay the loans to the banks,” he said.
He also disclosed that the only NED left on the board was the chairman, Belo-Osagie, clarifying that the Chief Executive Officer of Etisalat Nigeria, Mr. Matthew Wilshire, Chief Financial Officer, Chief Information Officer and Chief Commercial Officer are not directors of the company.
But as the crisis in Etisalat assumes a new dimension, it was also learnt that the Nigerian Communications Commission (NCC) and the Central Bank of Nigeria (CBN) have summoned a meeting, inviting the 13 banks, equipment suppliers and IHS, a telecoms tower and infrastructure provider, for a meeting friday.
They are slated to meet with NCC and CBN in Abuja to address the situation in order to stem value erosion of the network provider and job losses.
The banks, said a source, are also keen on reaching a resolution, as they would rather not appoint a receiver manager for Etisalat Nigeria.
Right now, the noose is being tightened around Etislat’s neck to repay the loan, with shareholder groups in the capital market advising the firm to settle the debt, even as the banks are insisting on the prosecution of the foreign directors of the company and its principal, Mubadala.
The banks claim that the Mubadala-appointed CFO of Etisalat Nigeria diverted over $700,000 from the proceeds of the sale of its towers to IHS.
Culled from Thisday