By Mohamed Alaa El-Din
The Independent Trade Union of Workers at Telecom Egypt (TE) filed four lawsuits to stop the disassociation of TE from Vodafone in order to protect workers’ rights and the 5% lobby of minority shareholders. The case has been registered in Cairo and the first hearing was set for the 9 April.
According to Mohammed Abu Quraish, Chairman of the Independent Trade Union of Workers at TE, nothing in investment laws obliges TE to disassociate from Vodafone in order to be transformed into an integrated operator that offers mobile services through an integrated network. He stressed that minority shareholders of TE, whose percentage is estimated at 5%, are able to stop the disassociation process, referring to the small shareholders of Mobinil Egypt, who were able to prevent the acquisition deal of Mobinil shares by France Telecom for a low price.
TE’s share in Vodafone is at EGP 7.7bn, 44.95% of Vodafone Egypt’s capital. Abu Quraish said he is arguing several points to stop the local company from dissociating from Vodafone. One of the arguments is that 45% of the company is a financial investment for TE with no right to management, and nothing obliges TE to sell its share in Vodafone Egypt when asking for or acquiring the right to provide mobile services, according to investment laws.
Investment laws aim to safeguard the rights of minority shareholders; therefore, shareholders of roughly 5% of stocks have the right to call for an irregular general assembly requiring the management not to sell TE through Vodafone Egypt.
The judiciary had protected the rights of shareholders when the Orascom share in Mobinil was offered for sale to France Telecom. The confidence of the board of directors was shaken for taking decisions against the minority shareholders’ interests.
