TANZANIAN PROBE HEAT ON AIRTEL OVER 2010 ACQUISITION
ATanzanianprobefoundthatthelocalunit ofBhartiAirtelwasoriginallytransferred fromthestateillegally, andthegovernment willstarttalkstoretakewhatitsaysisits rightfulshareofthebusiness. The investigationdiscoveredthattheinitial privatisationofTanzaniaTelecommunicationsCorp“regulations, andprocedure,” accordingtoastatement fromPresidentJohnMagufuli’sofficethat quotedFinanceMinisterPhilipMpango.
A Tanzanian probe found that the local unit of Bharti Airtel was originally transferred from the state illegally and the government will start talks to retake what it says is its rightful share of the business.
The investigation discovered that the initial privatisation of Tanzania Telecommunications “broke the law, regulations and procedure,” according to a statement from President John Magufuli’s office that quoted Finance Minister Philip Mpango. “What we saw was very dirty and terrible. In short, our country was conned and a lot of money was lost,” Mpango said.
For its part, Airtel said last month its 2010 acquisition of the 60 per cent stake in the company from Kuwait’s Mobile Telecommunications, known as Zain, was in full compliance and followed all approvals from the government. Tanzania’s complaint relates to the initial privatisation of the company five years prior to when Airtel took control, it said in a statement at the time.
Tanzania’s ownership claim follows an order by the government last year that telcos should sell at least a quarter of their units on the local bourse to boost domestic ownership. The local operations of Johannesburg-based Vodacom Group became the largest company on the Dar es Salaam Stock Exchange when it raised $213 million in August. Airtel has yet to list Airtel Tanzania, in which the government has a 40 per cent stake.
Magufuli said in December that Airtel Tanzania is a government asset in remarks aired on the East African country’s national broadcaster. Calls to Zain’s offices in Kuwait weren’t answered, while Mpango declined to comment on Friday.
Airtel reiterated a statement it made in December. “We are requesting the finance minister to share with us the specific findings or concerns...,” it said in an emailed statement on Friday. “We intend to work closely with the government of Tanzania and will take all steps to resolve concerns to the satisfaction of the government of Tanzania and all of the other stakeholders.”