Barclays Africa, the Financial Adviser appointed for the sale of 9mobile on Thursday disclosed that the company warned on the implications of the accelerated process adopted midway into the transaction.
Hasnen Varawalla, Barclays Africa Principal Partner, disclosed this during the investigative public hearing held at the instance of the House of Representatives’ Committee on Telecommunications chaired by Saheed Akinade-Fijabi.
He explained that 9mobile via a letter dated 18th February, 2018, communicated its intention to select Teleology as the preferred bidder of 9mobile, which was complied with without hesitation.
“In the letter, we stated the implications of the accelerated process,” Varawalla said.
“We are not decision makers on the asset but financial adviser,” adding that the Company acted on the instructions of the Consortium of Banks others known as Lenders.
“They have instructed us to accelerate the process, it was the acceleration of the process that led to the change of date. It was the Board of Directors and the Syndicate Lenders that took that decision,” Varawalla said in his testimony.
While responding to questions on the allegations bothering on the breach of due process raised by some stakeholders including Smile, the reserved bidder, O. J. Nnana, Deputy Governor, Central Bank of Nigeria (CBN) who doubles as Interim Chairman of 9mobile, he disclosed that the syndicate lender (comsortium of banks) have the right to determine the date and time for the completion of the financial transaction.
Nnana who described Smile as “soar loser” argued that the preliminary evaluation conducted by the panel set up by the 9mobile Board and Lenders showed that Teleology has the financial and technical capacity to acquire 9mobile.
He further noted that $550 million offered by the preferred bidder was acceptable to the Lenders above the $300 million offered by Smile during the bid.
Nnana confirmed that the sum of $50 million non-refundable fee was paid by the preferred bidder, adding that the letter for the signing of the share sales agreement with the preferred bidder has been written.
He argued that the new owner of 9mobile ran MTn for 10 to 15 years, adding that “Smile is just trying to derail the process unnecessarily.”
Nnana who informed the Committee that he was a member of Etisalat Board, maintained that “Etisalat failed because of financial recklessness.”
In reaction to the CBN Deputy Governor’s statement, Akinade-Fijabi alleged that “Smile and other stakeholders had raised a lot of concerns about the selection of Teleology as the preferred bidder.”
In a swift response, Ahmad Farruk, Group Executive Director of Smile Group the reserved bidder who alleged that Teleology bidded $301 million against the publicized $550 million alluded to by the Interim Chairman of 9mobile.
While describing the entire financial transaction as unfair and predetermined, Farruk alleged the process which was scheduled to end on the 26th February, 2018 was concluded on the 19th February, 2018 via a letter from the Financial Advisor, Barclays Africa.
He maintained that the technical capacity of the unilaterally selected preferred bidder was not given consideration in the course of shifting the goal post amidst the exercise.
Farruk also argued that with the financial capacity of Teleology, the company could get all the technical capacity required to run the telecom company from anywhere across the world.
He further explained that the company wrote a protest letter to the Financial Adviser on the illegality perpetuated before the closed five days before the agreed 26th February, 2018.
“We also objected to the $50 million and two or three things. The $50 million should have been paid immediately and we are prepared. We also queried the award of 21 working days. Why the 60 days? We ought to sign the dales agreement on the 26th February after paying the financial requirements,” he argued.
He maintained that the losing party in the untransparent transaction is 9mobile.
While giving update on the role of regulator, Umar Dambatta, NCC’s Executive Vice Chairman told the Committee that the public procurement Act is applicable to only government institutions not 9mobile which is a private entity.
He however noted that he advised the Board to adopt the provisions of the Public Procurement Act as a guide in the bid to avoid pitfall, but the advice was set aside.
Dambatta explained that there’s a 90 days timeline set by the Interim Board of 9mobile, adding that the Commission is still awaiting the preferred bidder to formally communicate intention to take-over 9mobile.
Members of the Committee who frowned at the position of the CBN Deputy Governor alleged that “the way the Deputy Governor sounds means it’s a done deal, whether a technical competence is good or not.”
While ruling, Akinade-Fijabi, who frowned at the disregard of the promoters of Teleology we’ve called on the preferred bidder but today they have shown us that they are not responsible. If they are serious about the take over they would have been here.
“We want to be on the side of Nigeria to see that this process is done in lime with due process and due diligence, and as the interim chairman of 9mobile, we want Teleology to be at the next hearing. We want you submit all documents that will help you and everybody behind the company and where it was registered,” he said.
The Chairman further clarified that National Assembly at any given time is not opposed to the sale of 9mobile but interested in ensuring transparency and accountability is followed strictly.
To this end, the Committee directed the Interim Chairman of 9mobile to come along with the promoters and management of Teleology and other stakeholders who have interest in the sale of 9mobile to appear in person.
While expressing concern over the decision of NCC to continue the process of handing over the spectrum and operational licence to Teleology despite the flaws, the need to amend the Nigeria Communications Commission Act, with the view to ensure transparency in the acquisition and transfer of assets in the telecom industry.
Recall that the Committee had last month halted the ongoing transaction on the sale of 9mobile, pending the conclusion of its investigation into allegations bothering on breach of due process.
KEHINDE AKINTOLA, Abuja
