Kufuor Named As Spoiler in Tussle With Investcom

India's Bharti Airtel may structure a stake sale to South Africa's MTN Group, part of a larger merger plan, through its holding company and parent firm, so there is no need for an open offer, two bankers and a legal source said.

But sources close to The Chronicle say that the deal, which is supposed to have ringfenced the original millions - some say $600 million - may thwart the merger issue, once it gets to the Bharti Group.


Bharti and MTN are working on a deal worth $23-billion in cash and stock, under which the Indian firm would get 49 percent of MTN, after MTN and its shareholders get a 36 percent stake in Bharti, with a full merger the long-term goal.


Nana Coomson, a businessman and an insider of the deal, says that the 20 percent shares held by Nana Richmond Aggrey, a Ghanaian telecoms prodigy, had been purloined through corrupt maneuverings inside the notoriously corrupt Registrar General Department.


He said he has reason to believe that by ex-President J.A. Kufuor, whose very close dealing with Scancom/investcom agents has not been thoroughly above board in his dealings with the Lebanese owned majority shareholders of the company, now known as MTN. They had comfort in shortchanging Mr. Aggrey.


"You remember when Mr. Kufuor was reported to have disappeared early last year? Do you know where he went, and whose plane he was flying in? Will Ghanaians own up and say he flew with Mikati's private plane around Europe, as they pressed him to get Aggrey to settle? President Kufuor had all the chance to settle this matter, yet he chose to sleep with the Lebanese and failed to support Richmond Aggrey.


How unhelpful can one get in a dispute between one's own country man and a foreign interest with very little long term interest in entrenching in the local economy?

MTN has no long term interest in Ghana. They have no interest, no buildings, only rented premises even though they made all their moneys here in Ghana. I have studied Scancom filings at the external accountants, their earnings which they used to set up telecoms operations at Cyrpus and other destinations, all the monies came from Ghana!', emphasized Kofi Coomson, the Publisher of Ghana's 'The Chronicle' daily newspaper, which has been covering the three year court struggle with Scancom and Aggrey.


MTN would get a 25 percent stake in Bharti, and its shareholders would get 11 percent under the deal. Under Indian regulations, the purchase of 15 percent in a listed company triggers an automatic open offer to buy a further 20 percent from the open market. "We believe that the proposed transaction structure would not trigger a mandatory tender offer in India," Bharti Airtel said on Wednesday.


The sources said the deal was likely to be structured in such a way that MTN got shares in either Bharti Telecom, the holding company of Bharti Airtel, or its parent Bharti Enterprises, or in both.


This reporter confirmed with Kofi Coomson, who has just returned from Takoradi that he did send email to Mr. Sunil Mittal, the top executive of Bharti, whose secretary Linda Clarke agreed to convey his reservations to Mr. Bharti about the MTN deal. Chronicle could not confirm whether he did carry out the threat of reporting scancom / Investcom, which still owns 13 percent of MTN.


Unfortunately, he said that the conspiracy has continued even into the Mills administration, where a lawyers of Scancom have been accompanying the former Managing Director of Scancom Ghana (now MTN), Mr. Farouk Ahmed, in the Lagos office, to the house of Vice President John Mahama for discussions on their operations. The honourable Vice President was one time Minister of Communications.


Chronicle's own research and comments from Mr. Aggrey in court, suggest that President Mills, who in 1997/8 was the Vice President of the country, was approached by Mr. Aggrey to intervene in ex-President's swashbuckling Rawlings' misguided assault on Nana Aggrey, resulting in his feigned flight from the company's board room.

According to Reuters, under the route, Bharti Airtel would file the deal as a 'scheme of arrangement' under the Indian Companies Act that would exempt MTN from an open offer. "At this juncture, regulatory hurdles are the steepest. Bharti and MTN seem to have thought of it quite carefully," said one banker, who had knowledge of the deal, but declined to be named as he was not authorised to speak to the media.


Bharti and MTN's previous merger talks collapsed a year ago over who would control the combined entity. Bharti also said on Wednesday that the deal would meet laws limiting foreign investment in Indian telecoms at 74 percent.


"Bharti Airtel's current FDI level is in the low-40 percents... Bharti Telecom will continue to be the largest shareholder in Bharti Airtel and together with MTN and SingTel shall have a majority economic interest in Bharti," the company said.


According to Mr. Coomson, any deal with MTN which paid and deployed Kroll South Africa to undertake due diligence for them four years ago, would have to countenance Aggrey, because he is going to raise the alarm if they didn't. Proceeding without Mr. Aggrey poses a fiduciary hurdle which the respective boards will have to clear.


"When Kroll, one of world leading investigative agencies in the world, did their due diligence, the Lebanese entity knew of Aggrey's shares and yet went ahead and sold the company for $5.4 billion. They told the Ghanaian court that they had taken care of Aggrey's shares, but they have not, and tried to break him by filing 19 applications at the least, which have all failed, even the cases in Texas, USA".


"I tell you of the extent of their greed in spite of the $600 million they had ringfenced or set aside for any shareholder who came up, and so far it is only Aggrey who is fighting for his shares, out of the $5 billion they sold scancom to MTN for!"

Chief Aggrey's struggle for Justice with the Lebanese friends of his, Kofi recalls the genesis of his friendship with Aggrey since 1993 when he was a scholar at Harvard University, and joined the Atlanta community to raise funds to organize demonstrations against Rawlings who was visiting Atlanta at the time. VOTING RIGHTS


According to Reuters report on the Bharti-MTN deal, even if a scheme of arrangement leads to changes in the management control, board reconstitution and economic interest in the firm, an open offer is still exempted under the takeover code. The process needs to be approved by a court.


Bharti Telecom is the largest shareholder in Bharti Airtel with a 45.3 percent stake, according to estimates by CLSA released in February. Bharti Telecom is 67 percent owned by Bharti Enterprises and 33 percent owned by Singapore Telecommunications.


SingTel also has a direct 15 percent stake in Bharti Airtel, giving it a total holding of 30.4 percent, according to CLSA. If MTN were to get its stake through the holding firm or parent, they would not necessarily have board representation or voting rights equal to their holding, the sources said.


When announcing the deal on Monday, the firms said MTN "would have appropriate representation on the Bharti board." But they have not accounted for Aggrey's struggle for Justice. They have not even taken into account Mrs. Justice Cecelia Kwofie's emphatic judgement in the High Court last year that forbade any company wishing to deal with MTN should take into account Aggrey's shares.


Further, MTN shareholders may get a stake in Bharti Airtel through global depositary receipts that do not carry voting rights unless converted into equity shares, the bankers said.

For Aggrey, the 58 year old chief of Benso, near Swedru, whose permanent smile refuses to give in to the menace of his tribulations, he is still resolute in his battle with MTN.


On June 5th, the Accra commercial court will sit to continue the process after the disastrous sneak court attacks in the US courts. Once again, aided by his high stake lawyers in Texas, the silent resilient chief overcame them without a whimper, and in spite of Kufuor's antics.