Tech investor, Victor Asemota, reacts to Tinubu’s claim over Econet
Tech investor, Victor Asemota, has denied the claim by a presidential aspirant, Bola Tinubu, that he brought default telecommunications company, Econet, into Nigeria, during his time as Lagos State Governor.
During his screening before the All Progressive Congress (APC) presidential aspirants screening committee, Tinubu, told the panel that he was crucial to the growth of the telecoms industry by introducing Econet Wireless into the Nigerian market.
But Asemota said on Tuesday, via Twitter, that Tinubu’s statement was false, as the state governor was only brought in at the latter stage following Econet Zimbabwe’s failure to pay for its 40% share in Econet Wireless Mobile (EWM).
He explained that his uncle had pitched a telecoms company, “CyberTel” to many state governors in Benin in 2000, but only Delta State showed interest. Following the meeting, CyberTel merged into a consortium called “First Independent Networks Limited (FINL)”.
He explained further, that FINL went on to establish license entity, Econet Wireless Nigeria (EWN), under which is the operating entity, EWM, which Tinubu had claimed to have brought into Nigeria. He explained that the former governor came into the picture through Wale Tinubu, the founder of Oando, which became one of the investors in Econet Wireless.
It was gathered that due to Econet Zimbabwe’s failure to provide its share capital, the investors in Econet Wireless had solely taken on a burden of $285 million license fee, and in order to ease the financial burden, a decision was made to go back to state governments to buy off the secondary shares that the investors had taken on – that was how Wale introduced Tinubu to the Econet Wireless deal.
Read also :‘Banking in Nigeria is about power, not service,’ says tech investor, Victor Asemota
“My uncle held a party for Tony Anenih Jr after his wedding in 2000 in Benin City. Many of the new state governors were in town and came for the party. He got five of them into his bedroom and pitched a company called “CyberTel” which was supposed to bid for a GSM license.
“Only Delta State was very keen on it. The others told us that they would get back. Cybertel merged into the consortium called First Independent Networks Limited which was started by Bolaji Balogun and his team at City Securities Limited. It was a harrowing period.
“I remember traveling to Delta and Akwa Ibom to try to ensure the commitment of the states. FINL was supposed to hold 60% of the license holding company and 40% went to the foreign partner. We later selected a small company from Zimbabwe called Econet because we felt it was easier.
“Econet was supposed to bring 40% of the license money and the technical know-how. We had the equity agreement as shareholder and technical services agreement as operator of the license. That 40% never came. It was excuse after excuse. We finally had to go back to the states.
“The initial structure we had proposed was for the license entity Econet Wireless Nigeria (EWN) owned by FINL and the technical partner to own 60% of the operating entity Econet Wireless Mobile (EWM) and the remaining 40% coming into that entity from states like Delta and AKSG.
“When the 40% from the operator wasn’t coming and other shareholders were leveraged to the hilt, state governments were allowed in to buy secondaries from existing shareholders who had covered the initial $285m license fee they didn’t bargain for. Shareholders approached states.
“OANDO was a shareholder too. I had convinced them to buy into EWN/FINL in spite of Jite’s reservations. He was asking me why India had not seen growth because of GSM? Wale was convinced that it was the right thing. Osaze Osifo from HSBC Capital also had convinced him that it was.
“Osaze and Wale were old classmates. Osaze was running the entire financing of the deal and was a true genius. He was the one who arranged the primaries and secondaries in a manner I am still learning from till today. Wale got Lagos State to buy their secondaries and come in.
“That was the extent of the Lagos State involvement in the deal. His relative was the state governor and it made it easier for OANDO to convince them. Tinubu didn’t even commit to Cybertel initially. Delta State and Oceanic saved ECONET. David Edevbie saved us all.
“David was also the one who suggested still giving the operator 5% even though they didn’t bring any money and almost got us wrecked. That proved to be the biggest mistake we made.” Asemota wrote.
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