How Econet was forced out of Nigeria – Strive Masiyiwa

Strive Masiyiwa is the chairman and founder of Econet, a diversified telecommunications group with operations and investments in Africa, Europe, North America, Latin America and the Asia Pacific. His business interests also include renewable energy, water treatment, Coca Cola bottling, financial services and hospitality. He is, reportedly, Zimbabwe’s richest men and one of Africa’s most powerful and richest men. He led his company, ECONET, to partake in the auction for GSM licence in 2001, winning one of the four licences on offer. But his stay in Nigeria was not to last long.

Much of what transpired has not been revealed, with the matter ending up in court. The company has continued to change hands, changing names over and over, but the pioneering role of Strive Masiyiwa has never been in doubt. Recently, he took the lid off the story of his experience in Nigeria, opening a can of worms on corruption and boardroom intrigues. He throws up a lot of questions on ethics and corporate governance in the business and entrepreneurship space in Africa,

Paying the price.

“I had the privilege of making Nigeria’s first GSM phone call back in 2001 when I called the regulator to say, “We’re live!” Who would’ve believed then that Nigeria today would have more than 167 million mobile phones?! It all started out as a very exciting new chapter for enterprise in Africa. Shortly after President Obasanjo was elected, the new government announced an incredibly transparent international auction process for three national mobile phone licenses.

To participate in the bid, you not only had to raise money, but there had to be a member of the bidding consortium who was an experienced GSM operator.
Econet Wireless met the requirements because of its experience in Zimbabwe and Botswana. Our Nigerian partners, which included state governments, local banks and high net worth individuals, were financial investors. The largest shareholder had only 10%. That was the written agreement.

I managed to assemble a consortium of 22 investors to put up the money needed to bid. Our shareholders were all Nigerian, mostly institutional investors including leading banks and two state governments, Lagos State and Delta State. The license cost us $285m and was the most expensive license ever issued in Africa at the time. This was 2001. We considered the investment not only about putting together a network, but also about building a nation. We knew it had the potential to transform Nigeria’s entire business and social architecture.
Most of our investors had between 1-10% shareholding. Econet Wireless Nigeria had only 5% of the shares, but that was fine because it was 5% ownership of a very big pie. As the “technical partner and operator,” Econet was the company with the expertise to build and operate such a business. James IboriOur financial investors recognised this, and also allowed us to receive 3% of the turnover as our fees. This was standard practice in the industry. We were one of the winning bidders and they gave us just six months to set up business and get our network operating. We were under a lot of pressure but our network was live two days before the others! Customers were pouring in. We were number one in the market with an estimated 57% market share.

Then came the fateful day when I was told that our company must pay a total of $9m in bribes to senior politicians (in state government) who had facilitated the raising of the money to pay for the license. I refused to authorise the illegal payments. Meeting after meeting was held to try to get me to agree, but I would not. The money would not be paid as long as Econet was the operator and I had signing authority.

The Governor of Delta State, James Ibori, was demanding $4.5m be paid to him in his personal capacity. He was one of the most powerful men in the country and had a reputation for violence. When he heard that I was refusing to approve payment he issued an ultimatum: “Pay or I will chase you and your people out of the country.” I refused.

The shareholders met and voted Econet Wireless Nigeria out of management. They cancelled our management contract. James Ibori and his colleagues personally attended the meeting to remove us. After the meeting one of them (a prominent local businessman even today) came up to me and said: “Unfortunately for you, God does not have a vote.” I had to withdraw all my staff and their families: 200 people in all. We left Nigeria.

Most of our people had to be retrenched. The loss of the contract almost drove us to bankruptcy as a group.
They invited a big international operator to replace us as technical partner and operator. They changed the name of the company from Econet to Vmobile.

Within days of their arrival, the managers of the new operator signed off the payments demanded as bribes.Then what happened? A few noble Nigerians had both the integrity and courage to carefully collect all the documentation on the movement of the money, and pass it all on to me. There’s a sayingworth remembering in uncovering the trail of destruction that is corruption: “Follow the money”


It was 2003. I bided my time… then I wrote a letter to the United States Department of Justice! In my letter to the US Justice Department, I detailed the full history of the demands for a bribe. I had dates, times, records. I then reminded them that since the big international operator had a listing on the New York Stock Exchange, they were duty-bound to launch an enquiry.

Why did I go to them?The United States government has a law called the Foreign Corrupt Practices Act. The United Kingdom has a similar one called the British Anti-Bribery Act.
Whatever you do, make sure you never fall foul of those laws because, if they ever use them to come after you, you’re a “gonner” my friends.

A few weeks later, US officials wrote back advising me that an enquiry had been launched.
They contacted the big international company seeking answers to my allegations. My contacts at the company called to tell me, “All hell has broken loose at the company.” The parent company of the South African-based multinational sent external auditors and lawyers from London to Nigeria. They immediately dismissed all the
senior executives sent to Nigeria to run the company, and they left in a hurry!

Although they fled the scene of the crime and returned to their country — after admitting even to both the US Justice Department and the EFCC that the money had been paid out – the stolen funds were never returned to the Nigerian people, even to this day. Meanwhile, the departure of the other mobile operator did not mean we could return to Nigeria. The shareholders found another operator, this time from the Middle East.

They sold this new operator the control of the company even though Econet Wireless Nigeria had the “right of first refusal” over any sale. They simply ignored that provision in our agreement. This was illegal, both according to our shareholders agreement and Nigerian Company Law. It was left for us to take up the fight in another forum, the Nigerian courts.


The State government of Akwa Ibom held 15% of the equity in Econet Wireless Nigeria. This state was not one of the original investors but joined us later. After five years, the Governor of the state of Akwa Ibom decided to sell its stake. It had more than doubled in value in dollar terms, which meant it had been a good investment. The state Governor, an elderly gentleman, Victor Attah sent a message through a friend that he wanted to see me in London to find out if I was interested in exercising Econet’s right to buy its shares. I agreed to meet him in London.

“I want to sell the shares to build an airport before I leave office,” the governor explained. The Governor was accompanied to the meeting by a British lawyer who sat quietly taking notes. His name was Bhadresh Gohil. With a wave of his hand, the governor said, “Mr Gohil is our legal advisor here in London. I have instructed him to handle all our negotiations with you.”
The meeting did not last more than 30 minutes, as the governor was on his way to catch a flight to the U.S. We agreed with Mr Gohil that we would meet with my own advisors a few days later to start the process.

A few days later, I went to his office with a professional banker who advised me on such transactions. We met in the lawyer’s plush London offices. He was confident and smooth- spoken as he explained how much we were expected to pay. Then he explained that our money was to go to a “Special Purpose Vehicle” (SPV) before it was transferred to Nigeria. It was a sophisticated structure and he showed me a drawing of how it would work. I wrote it all down very carefully into my notebook.

Such corporate entities as SPVs can definitely have legitimate purposes, but this one did not! As I quizzed him about why such an unusual structure was necessary, Mr Gohil changed tact and tried to entice me with an offer I could not refuse (or so he hoped): “I’m also the advisor to the governor of Delta State… and if you agree to pay for these shares using this structure, we will offer you shares belonging to all the state governments. In total, you can have more than 30% additional shares. It will be enough to take control of the company. My clients just want out, and they are willing to give you what you have always wanted.”

I listened to him, quietly taking notes in my small notebook. I did not give away anything, but inside I was very angry. From the design of the structure, I knew immediately that it was meant to siphon off money before it reached the state governments. It was clear there was a conspiracy to steal a lot of money Having already pocketed $13.5m, now the government officials could easily pocket probably another $100m through the sale process that they had developed with the help of Mr Gohil and other clever advisors in London!

When I left the meeting, I immediately contacted the mutual friend who’d set up the governor’s meeting. The friend was so embarrassed as I explained the corrupt structure clearly designed to steal money from the state governments. He promised to raise the issue with Governor Victor Attah. A few days later he came back and said Governor Attah had claimed ignorance about the proposal put to me by Mr Gohil. He said he would speak to Mr Gohil and tell him it had to be done properly without the structures.

We never heard from them again. Mr Gohil simply vanished. A few months later we were told that the shares had been offered to a company from the Middle East who subsequently bought them. I was not privy to how they did it except that they had violated my right to buy the shares… That is another chapter in the saga, but not for now. Fast-forward three years, long after the sale. Our lawyers in London called me one day and asked if I could come urgently to a meeting with the Proceeds of Corruption Unit of the London Metropolitan Police: “You are not in any trouble, but I think you will find what they have to say very interesting!” This special unit was launched by the British to investigate corruption by foreign government officials who try to launder stolen money to the U.S. and the UK.

The officers asked me to explain everything I knew about the sale of V-Mobile shares to Celtel (later Zain). I explained the history of the entire transaction and the shareholders disputes that had led to our departure. After awhile, they asked me to focus on specific events, and, in particular, my meetings in London with the governor of Akwa Ibom, and also the meetings with Mr Gohil. It became clear to me that they had a lot of information!

“What can you tell us about this structure, using a Special Purpose Vehicle?” I explained my understanding of it. Later on, I gave them my diary in which I had recorded the details of my meeting that day with Mr Gohil. I had written in bold letters: “This is corrupt!!!”

Not long after my meeting with the Proceeds of Corruption Unit, Mr Gohil was arrested together with one of his partners and several others. I later learned that when the Middle Eastern company bought the shares, some of the proceeds had been diverted using the Gohil structure. Some of the money was sent to a bank in London. This large amount of money was enough to alert the British authorities that money was being laundered through their banking system. Their investigations led them to Gohil and his associates. They raided his offices and found stashes of documents, including details of the structures. Now they were looking for witnesses to help prosecute them for corruption and money laundering.

The British authorities tried without success to get other parties, including the Governor of Akwa Ibom, to come out and clear their names but they refused. Officials of President Umaru Musa Yar’Aduah’s government successfully thwarted all extradition requests. I was asked to be a witness in the trial of those who had been arrested in London. I willingly accepted my role as a ‘Witness to the Crown” on behalf of the people of Nigeria whose money had been stolen. It would be the first time that someone big went to jail (in a foreign country) for stealing money from Africans.”


The International Tribunal appointed by the Chief Justice of the Federal High Court of Nigeria took four years to complete the process of arbitration. This included hearing from lawyers representing all the shareholders who had been involved in the original sale to Zain (the company from the Middle East), and also lawyers from Bharti Airtel (the company from India)
that had bought Zain’s shares. The Tribunal issued its ruling on 22nd December 2011. It was a great Christmas present!

Key findings in the Tribunal’s ruling:

# Econet had never ceased to be a shareholder despite the cancellation of its share certificate. We remain shareholders to this day, and those shares are now worth more than $200m.

# There was sufficient evidence that Econet had raised $1.5bn in cash to buy the shares that were sold illegally to Zain.

# The sale of shares, first to Zain of Kuwait, and then later to Airtel of India, were found to have violated Econet’s rights of first refusal under the Shareholder’s Agreement. The sale was declared “null and void” in law.

# The people who bought the shares (Zain and Bharti Airtel) were ordered to pay us hundreds of billions of Nigerian Naira in compensation, and damages for their violations.

# All shareholders who had supported the sale were ordered to pay compensation.
# The local shareholders who had stood with us throughout were absolved of any wrongdoing. In short, after being presented years of evidence, the Tribunal agreed there been multiple breaches of the Shareholders Agreement.

Whilst most of the Nigerian local shareholders immediately paid the money due, Bharti Airtel and Zain refused to pay what they had been ordered to pay. This was despite the fact that all parties are supposed to accept an Arbitration ruling as final. Instead they took the unusual decision to go to court, in Nigeria, and try to overturn the decision of the international Tribunal:

First, they went to the High Court of Lagos State; it ruled in OUR favour. (October 2012). Then, they went to the Nigerian Federal Court of Appeal; it also ruled in our favour, supporting previous rulings in our favour. (February 2014)

We had our hearings. We were heard.
We’ve had patience
and faith, and the rule of law prevailed.

Finally, they went to the Nigerian Supreme Court. We are now waiting for their ruling. I will let you know when it comes. In a separate ruling, the Nigerian Federal High Court and its Appeals Court dismissed the allegation that Econet had not originally paid for its shares. This allegation had been widely circulated in newspapers as the reason for our departure. They accepted evidence that Econet paid for its shares just like all the other shareholders, calling the allegation spurious and malicious. It took 10 years to get this ruling from the courts.

Like in any major conflict, all sorts of skirmishes have taken place. We had to fight other related legal battles in England, in Denmark, and in The Netherlands (including at The Hague Court of International Arbitration).

Throughout this saga in Nigeria, I had with me a few Nigerian brethren (and sisters) who stood by me. They were prepared to risk all to ensure justice prevailed. I salute them and all who stand up to protect the rule of law.


During the long period that went by, more than 10 years, I never stopped going to Nigeria despite the threats. I never stopped investing in new things in the country that interested me. I deepened my understanding of the country. I learnt to avoid many of the pitfalls of the past. I stayed true to my deepest convictions. I enjoyed myself. I love Nigeria.

The ensuing years have also been years of unprecedented growth and expansion of our business interests in Africa and around the world. We set up businesses as far afield as New Zealand, and invested in places as far as Latin America. Yes, we prospered and we went from strength to strength.

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