Local staffers on the employ of the second largest network carrier in the country, Zain have raised alarm over the on-going systemic replacement of senior executive Nigerian staff with Arab expatriates by the Kuwaiti-based parent company, MTC, which holds a majority stake in Zain.
Investigations carried out by THISDAY indicate that the Kuwaiti shareholder which owns 65 percent of Zain may end up eroding the local human resources base if government authorities fail to take urgent steps to stem the current attempt to ease out Nigerians from its top management hierarchy.
One Zain staff who spoke on the development said that “at the last count, four Nigeria executive staff had been replaced by expatriate Arab personnel who are not even as qualified as the people they are replacing.”
According to the official, “in the last three months, four Nigerians who hitherto occupied the positions of the Chief Human Resources Officer, Deputy Human Resources Officer, Chief Sales Officer and Chief Marketing Officer have been systemically replaced by Arab expatriates.”
He said that the problem with efforts by the parent company to “arabanise” its Nigerian subsidiary is that positions such as CHRO, CMO and CSO really ought to be left to people with an understanding of the local terrain and market.
“We really don’t know why Arab expatriates that will cost the company more to retain should be brought in. Given the economic downturn, other companies are implementing cost-cutting measures. Zain on the other hand is increasing its cost profile.”
It was gathered that the current trend was fuelled by the 2007 100 per cent acquisition of Celtel by MTC, the Kuwaiti based telecom giant.
MTC is therefore utilizing its shareholding advantage to strategically displace Nigerians already in key positions in favour of its citizens.
Although there is a Nigerian Chief Executive Officer (CEO) in the person of Bayo Ligali, the present move by MTC, it was learnt, is directed at further weakening his hold on the day-to-day running of the company, especially in the area of decision making.
The source confided that the situation had deteriorated to the point that “because MTC owns controlling shares, it is fond of taking unilateral decisions even at the board level without consultation.
“Right now decisions are brought to the board to be rubber stamped as most of the major issues that require vigorous deliberations are already a fait accompli when it comes to voting.”
The source pointed at the on-going fracas over the unauthorized payment for a five-year leasehold on a 5,040 square-metre property situated at Banana Island, Ikoyi for $27 million when its competitor, Etisalat acquired through outright purchase a similar property on 5,000 square metres for $20.8m.
The property in question currently serves as Zain’s head office at Banana Island and is said to belong to one of the directors/lawyers of Zain, Konye Ajayi (SAN).
Its rental by the company led one of the shareholders, Broad Communications last August to institute a derivative action at the Federal High Court, Lagos, citing poor corporate governance, among other issues
Making a case for the relevant authorities to intervene as it is done in other countries of the world, the official said “it is important that Nigerians must continue to retain some strategic positions on the management of the company for the obvious reason that they know the terrain and it is good for Nigeria especially for human capital development.”
It was revealed that Zain’s problems, which include series of litigations and counter litigations, could worsen as shareholders are spoiling for a fight over unpaid dividends about eight years after investing in the company.
Speaking on the development, an official with Broad Communications said concerns over “arabanisation” have not been brought to its attention and was unaware of it.
He stated that Broad Communications as a shareholder is more concerned with its law suit which is in the public domain.
In suit instituted by Broad Communications, the company is challenging the manner in which Celtel (later Zain) purportedly acquired 65 percent controlling shares in Vee Networks by a “board constituted without clarity as to which shareholders some members were representing; composition and chairmanship of committees of the board, especially the audit committee; the continued retention of the investment committee of the board despite the purported closure of the acquisition transaction together with its attendant cost; and the absence of sufficient or any communication from the company with regard to significant events affecting Broadcomm’s substantial investment in the business.”
Broadcomm is contending that these lapses sufficiently expose “the applicant’s substantial investment in the company to risk and fall short of international best practice in terms of corporate governance.”
Among the issues raised by the aggrieved investor were breaches of fiduciary duties to the company by the directors.
From inception, Zain has been mired in several battles and law suits that have stunted its ability to claw back MTN’s lead in the telecom market.
At the last count, there were three major legal suits hanging over Zain. On the one hand it is still in court with Econet Wireless International over pre-emptive rights to sell its shares to a new investor without affording EWI the mandatory 60-day right of first refusal.
Added to this is the Broadcomm suit against the Delta State government over the sale of its shares without following due process, and lastly Broadcom’s latest suit challenging what it described as failure of corporate governance, breaches of director’s fiduciary duties to the company and unfair and prejudicial conduct against the present board headed by the chairman, Gamaliel Onosode.”
Mar72009