Econet directors face imprisonment

ECONET Wireless directors face imprisonment for contempt of court after they allegedly defied two High Court orders barring them from terminating a joint venture deal with a Namibian firm.

Trustco Mobile, which jointly operated Econet's Ecolife cover and the bonus points system, has since filed an application at the High Court seeking 90-day jail terms for Econet chairman Mr Tawanda Nyambirai, deputy finance director Mr Roy Chimanikire and chief executive officer and director Mr Douglas Mboweni.

In response, Mr Mboweni deposed an affidavit on behalf of the company and his co-accused opposing the application.

He denied the contempt of court allegations, saying there was no evidence or proof of the alleged breach of court orders.

"It is categorically and emphatically denied that first respondent has failed to abide by the provisional orders referred to and or unlawfully and or intentionally violated the repute of this honourable court.

"It is also categorically denied that the third respondent (Mr

Nyambirai), fifth respondent (and Mr Chimanikire) and I, have in any way occasioned any non-compliance with the two provisional orders.

". . . not even one iota of evidence has been set out in the deponent's affidavit to support the averment that the respondents have occasioned non compliance with the provisional orders".

The same company has applied that Econet (the company) be fined US$20 000 for the same offence.

Trustco Mobile Private Limited in 2010 entered a deal with Econet to provide life cover and bonus points to Econet subscribers against purchase of airtime.

The High Court is yet to determine the contempt of court application.

In August 2010, Econet, Trustco and First Mutual Life Assurance concluded a tripartite agreement in which the Namibian firm was to provide software and support service to Econet for facilitation of the free life insurance cover to Zimbabwean cellular phone users.

Under the deal, Econet would procure life cover from First Mutual Life Assurance.

The free life cover was going to be offered to all clients against purchase of Econet airtime.

A misunderstanding arose between Econet and Trustco, resulting in Econet "terminating" the deal early last year.

Trustco obtained a provisional order nullifying the said cancellation from the High Court.

Econet challenged the ruling at the Supreme Court.

Trustco got another provisional order from the High Court to execute the earlier judgment pending Econet's appeal.

Trustco feels Econet, through its directors, breached the two provisional orders by ending the deal.

The foreign company, through its lawyers Advocate Thabani Mpofu who is being instructed by Gill Godlonton and Gerrands law firm, has now filed a contempt of court application at the High Court against Econet and its three directors for defying the same court.

Trustco argues that the two provisional orders compelled Econet to restore Trustco's access to the mobile platform and to restore all Internet-based reporting links to the foreign company.

The orders, Trustco contends, compelled Econet in more general terms to facilitate performance by Trustco of its obligations in terms of the agreement.

Trustco argues that since the issuance of the two provisional orders mid last year, Econet has not restored the necessary Internet-based reporting links to Trustco in breach of the orders.

An executive director for Trustco Mr Quinton Van Rooyen deposed an affidavit outlining how Econet allegedly breached the provisional orders.

"First respondent (Econet Wireless) has failed to provide the historic CDR data to the first applicant for the duration of the period between the termination of first applicant's access to the platform and the compliance date," read the statement.

It is also argued that Econet has failed to provide the requisite SMS connectivity and the full working code necessary for the reintegration of the respective parties' systems, which would facilitate the provision of the necessary historic data and restore SMS connectivity.

The alleged breach of the court orders, according to Trustco, has precluded it from calculating any royalties payable to it and any damages to which it may be entitled in respect of consequential loss it has suffered consequent to the initial "termination" of the agreement.

The same actions reportedly precluded Trustco from communicating life insurance cover balances and other essential information to mobile phone users and Ecolife subscribers.

Trustco contends that Econet and its three directors should be found guilty of contempt of court.

Mr Mboweni argued that Trustco, being a foreign firm, should furnish the court with security for costs to the tune of US$25 000.

The Econet bosses argue that there was no basis for them to be declared to be in contempt of the High Court.

They also argue that they were never cited in the court proceedings in which the two orders were issued and that they were never served with the orders in question.

They further argued that there was nothing in the application showing that they personally instructed Econet not to comply with the orders.

The directors also indicated that Econet, which was cited in the two proceedings, had fully complied with the orders.

It was also indicated in the papers that the service of the two provisional orders was defective.

Econet argued that the historic data was provided to Trustco and that its access to the mobile platform was restored.

The parties are yet to file their heads of argument before the court hearing date.