How Ibori closed Econet over refusal to pay $4.5m bribe

Unknown to many Nigerians, the first GSM operator in Nigeria, Econet Wireless did not fail due to adverse economic situation or a lack of patronage, it failed and had to leave the shores of the country, simply because of frustrations over the refusal of its then management to pay bribe money demanded by politicians

Founder and Executive Chairman of the company, Strive Masiyiwa revealed that the company was voted out by Nigerian shareholders due to his refusal to pay $9m in bribes to some senior politicians in the country.

He made the revelation in a series of articles he posted on Facebook titled: ‘It is time to play by a different (ethical) set of rules’.

Masiyiwa, who has been named by the CNN as one of the 50 most-influential business leaders in the world, founded Econet Wireless in Zimbabwe in 1998, with the Nigerian subsidiary coming on board in 2001.

He noted that Econet Wireless participated in the auction process announced by the administration of former President Olusegun Obasanjo for three national mobile licences.

He said, “Econet Wireless met the requirements because of its experience in Zimbabwe and Botswana. Our shareholders were all Nigerian, mostly institutional investors, including leading banks and two state governments, Lagos State and Delta State. The licence cost us $285m and was the most expensive licence ever issued in Africa at the time.

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“We were one of the winning bidders and they gave us just six months to set up business and get our network operating.

“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 governments) who had facilitated the raising of the money to pay for the licence.”

Masiyiwa added that he refused to authorise the illegal payments, and alleged that a former governor of Delta state, James Ibori, was demanding that $4.5m be paid to him in his personal capacity.

“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’.

“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.”

Masiyiwa said that he consequently withdrew all his staff and their families, numbering about 200, from Nigeria.

“They invited a big international operator to replace us as a technical partner and operator. They changed the name of the company from Econet to V-Mobile,” he said.

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