Lap Green Networks, the Libyan Investment Authority's international telecommunications arm, has lost a bid for the restitution of its stake in Zambia Telecommunication Co. (Zamtel).
The Zambian government had nullified and reversed the sale of Zamtel shares to Lap Green Networks three months ago. On Wednesday, the Zambian high court dismissed an application by Lap Green that sought relief to stop the Zambian government from interfering with its stake in Zamtel.
The court said it does not agree with Lap Green that since the reversal of the stake was contentious, it is necessary to grant an interim measure of protection.
Lap Green had filed an application for an order of interim relief in the Lusaka High Court in February. The application sought to prevent the Zambian government from further interference that would be adverse or prejudicial to the sub-Saharan communication company's 75 percent shareholding in Zamtel.
But Lusaka High Court Judge Albert Wood noted that damages sought by Lap Green in a separate Zambian court would be an adequate remedy in the event that the court rules in favor of Lap Green Networks.
Lap Green sued the Zambian government, demanding to be compensated US$480 million for the shares that were seized. The compensation claim has not yet been heard by the other Zambian court, prompting Wood to dismiss the application for the interim restitution of the company's stake.
Wood said in a ruling that an order for interim relief, among other things, cannot be granted before a hearing.
"The correct position is that the application should be heard and determined first before an order, writ or direction is issued for purposes of enforcing or securing of any provisions in the Constitution," Wood ruled.
Wood also said, "It will not be an insurmountable task to determine the damages being claimed."
The shares were bought in 2010 at a cost of US$259 million. The previous Zambian government sold Zamtel to Lap Green Networks in 2010 for $257 million after failing to recapitalize the company. But the current government of President Michael Sata constituted a Commission of Inquiry to investigate how the company was sold. The inquiry produced a report that showed irregularities in the manner in which the company was sold, alleging that Lap Green Networks and RP Capital, which was appointed as financial adviser, bribed senior Zambian government officials.
Meanwhile in Rwanda, the company has also lost its assets following the decision by Rwandatel administrator Richard Mugisha to allow India's Bharti Airtel to acquire Rwandatel's telecom masts. Lap Green Networks owned 80 percent of Rwandatel while 20 percent was owned by National Social Security Fund of Rwanda.
Airtel, new in the Rwandan telecom market, has paid $15.5 million to acquire the GSM masts. Rwandatel assets are up for grabs after a Rwandan court's decision last year placed the company under liquidation. Other assets including data and Internet service infrastructure and fixed telephony infrastructure are still up for sale.
Rwandatel's problems began when its GSM license was revoked last year by the country's telecom sector regulator, Rwanda Utilities Regulatory Agency (RURA). RURA said Rwandatel failed to comply with its obligations of proving quality telecom services.