COURT RESTRAINS KASAPA SALE

THE Accra Fast Track High Court last Wednesday restrained an attempt by Hutchison Telecommunications International Ltd (HTIL), the majority shareholder in Kasapa Telecom Ltd, to sell the company.
The court granted a motion ex-parte application for interlocutory injunction moved by Mr Atta Akyea, counsel for Kludjeson International Ltd, the plaintiff and claimant of a 20 per cent interest in Kasapa.
It said the order was valid for 10 days and subject to renewal and also affected Certwell Ltd, the second defendant/respondent.
Despite the fact that there is court action pending in Ghana, Hutchison Ltd through their agents, HSBC Bank Plc of South Africa, have offered Kasapa for sale and closed bidding on August 10, 2007.
According to the Kasapa Information Memorandum, “bidders were expected to deliver a written indicative offer (the "Indicative Offer”) not later than 12 p.m. South African time” on the said date to Andrew Hunt at HSBC in South Africa.
“The selection of parties for Phase II of the bidding process will entirely and exclusively be within HTIL’s discretion. HTIL reserves the right to reject any Indicative Offer, without offering any reason for its discretion,” the memorandum stated.
It said the memorandum had been prepared by HSBC Bank Plc (including, where applicable, its subsidiaries and affiliates on behalf of HTIL and was being made available to a number of recipients to assist them in deciding whether to proceed with a further investigation of Kasapa.
Furthermore, it was not intended to form the basis of any investment activity or any decision to purchase HTIL’s 100 per cent shareholding in the company.
“This Memorandum is being made available only to parties who have signed and returned the confidentiality agreement between HTIL (for HSBC acting as an agent on behalf of HTIL) and the recipient (Confidentiality Agreement), and the recipient is, therefore, bound by that confidentiality agreement in respect of all information,” it said.
It noted that HTIL was contemplating selling its 100 per cent shareholding in Kuwata Ltd, a company with an indirect 100 per cent interest in Kasapa, and that both Kuwata and Certwell Ltd were holding companies with no operational activity.
Kasapa, it noted, was HTIL’s only operation in sub-Saharan Africa.
Regarding litigation and other issues, the memorandum said, Kludjeson International, a former 20 per cent shareholder of Kasapa, initiated proceedings in the Ghanaian courts in October 2001 against Kasapa and several individuals, including members of the management.
It said Kludjeson International alleged that the Managing Director of Kasapa had not been properly appointed and, therefore, a number of actions taken by the management of Kasapa were improper.
“Kasapa successfully defended the action and in April 2005, a judgement was entered in favour of Kasapa and the other defendants.
“However, in a separate action brought by Kludjeson International before a different judge, the court on April 25, 2007, ruled, among others things, that the present Managing Director and Chief Financial Officer had not been properly appointed to their current positions and to the Board of Directors ( as directors or alternates), and that the change of the company’s name from Celltel Ltd to Kasapa was void,” it said.
It said the company had appealed against the April 25, 2007 decision on various grounds, including the fact that the court dealt with matters which had already been adjudicated in favour of Kasapa in the April 2005 judgement.
“A stay of execution had been granted pending resolution of the appeal. Management has sought legal advice and believes that this matter will be resolved in favour of Kasapa,” the memorandum said.
However, in his affidavit in support of the motion ex-parte, Mr Kwame Kludjeson, director and shareholder of Kludjeson International, stated that the company was incorporated under the laws of Ghana, carrying telecommunications business and a shareholder of Celltel, which name was purportedly changed to Kasapa but the original name was restored by a High Court judgement of April 12, 2007.
He said by a share purchase agreement and a shareholders’ agreement both executed on March 30, 1998 between Kludjeson International and HTIL, it was agreed that HTIL purchase 80 per cent shares in the company, leaving Kludjeson International with 20 per cent.
Mr Kludjeson said to induce Kludjeson International to finalise the agreements that would transfer to HTIL its equity of the company, HTIL by a shareholders’ resolution dated June 10, 1998, disclosed that it was nominating Certwell Ltd, which it falsely represented as its subsidiary, to hold the shares in the company on its behalf.
The plaintiff said based on that reliance, it agreed to transfer 80 per cent of the shares in the company to HTIL and the company was led by HTIL to believe that it was at all material times dealing with HTIL through Certwell.
Kludjeson International stated that it subsequently discovered that at all material times Certwell was not a wholly owned subsidiary of HTIL, contrary to the representation it made; rather Certwell was a wholly-owned subsidiary of Kuwata Ltd, a company incorporated in the British Virgin Island and a total stranger to the arrangements between them.
The share offer, it said, was being done clandestinely under confidential cover and unless the court swiftly restrained the defendants from disposing of the shares, Kludjeson International would suffer irreparable damage.