Some Airtel Malawi plc shareholders have dragged the company to court, seeking that it be de-listed from the Malawi Stock Exchange (MSE).
The shareholders accuse Airtel Malawi plc of concealing to prospective investors information about a K5.7 billion court case when it was being listed on the stock market in 2019.
Airtel Malawi public relations manager Norah Chavula on Thursday acknowledged the company’s receipt of the court summons, but refused to comment on the matter.
The claimants contend that the concealment, including botched profit forecast, deprived them and other potential investors a fair and reasonable opportunity to assess the potential loss that the company could suffer and clear reflection of its liabilities if found liable in the said pending litigation.
Claimants Frank Harawa and Chandrakant Makadia, in Commercial Case Number 83 of 2021, through lawyer Burton Mhango, believe the company and its directors breached statutory duty to disclose the pending litigation as prescribed by law.
Apart from Airtel Malawi plc, the other defendants are Plastone Alex Chitsime, Charles Mustafa Kamoto, Alok Bafna, Ian Ferrao, Neelesh Pratap Singh and Kayisi M’bwana Sadala.
They state that they proceeded to acquire shares and to make investments in the company and feel the directors breached their fiduciary duty to act reasonably in the circumstances and to disclose details of any pending litigation as required by law.
The case in question, currently in the Supreme Court of Appeal, relates to a K5.7 billion demand by the Malawi Revenue Authority (MRA) from Airtel Malawi as non-resident tax, dating to 2012.
Besides, the claimants argue that a financial statement on December 20 2019 provided in the prospectus indicated a profit forecast of K18.088 billion for the year-ending December 2019, but by the 31st of that month, it showed a profit of K15.908 billion, which is 12.05 percent lower that the profit forecast.
Based on this, the claimants believe the directors fraudulently misrepresented the company’s financial status, involved and participated in an unlawful and unfair trade practices, but also deceived prospective investors, including the claimants.
As such, they asked the court for several reliefs.
Mhango confirmed the summons and said they were already served on Airtel Malawi plc.
He said: “The orginal summons was delivered on Airtel on March 11 2021. The amended summons was also delivered on March 29 on their lawyers Racane Associates.”
Chavula also acknowledged receipt of the summons in an interview on Thursday.
She said: “Yes, we note the court case and as per the sub judice rule, we cannot comment on any case which is in court.”
The company listed in February 2020.