Millicom has headed off a legal challenge claiming that the operator was not the full owner of its subsidiary Tigo Tanzania.
The dispute was brought against Millicom by Golden Globe International Services LTD and Quality Group LTD, with the companies alleging that in 2014 they acquired 34,479 shares in Tigo Tanzania’s holding company MIC Tanzania LTD. This would have meant that the two firms owned 99% of the business between them.
However, The Court of Appeal of Tanzania – the country’s highest court - ruled that Millicom was Tigo Tanzania’s legal full owner. The court noted that it had genuine cause to dispute the claims and declared the share purchase by Golden Globe and Quality Group to be null and void.
In a statement, Millicom noted that the legal action resulted from an “improper filing of shareholder claims by a third party alleging to have acquired shares through proceedings. The commercial register will now be corrected to show the Millicom group as the ultimate owner of 100% of the shares in Tigo Tanzania.”
The ruling clears the way for an IPO of Tigo Tanzania, with Millicom having filed for an offering on the Dar es Salaam Stock Exchange at the end of 2016 – partly to comply with a government requirement for operators to divest 25% of their shares. The process has been stalled by the ownership dispute, so now that this has been resolved an IPO is expected imminently.
According to statistics from the Tanzania Communications Regulatory Authority (TCRA), Tigo has a 28% market share. This puts it in second place behind Vodacom, which leads the market with a 32% share.