Controversial Asset Seizures: MTN and Chococam Await Court Ruling

Douala, Cameroon* – The Commercial Division of the Tribunal de Grande Instance (TGI) of Wouri is set to deliver its ruling on July 23, 2024, regarding a contentious case initiated by Bestinver, a holding company tied to prominent businessman Baba Danpullo.

The company filed a petition on October 3, 2022, seeking the release of conservatively seized funds from the accounts of MTN Cameroon (MTNC) and Chococam. The seizures, amounting to nearly 144 billion CFA francs at MTN alone, include approximately 120 billion CFA francs from its Mobile Money deposit account, traditionally considered immune from such actions.

MTN Cameroon, a subsidiary of the South African telecommunications giant, has expressed surprise at the TGI's decision, which appears to have been made "without any substantive debate." Initially scheduled for deliberation on June 6 with a verdict expected on July 4, the decision has faced repeated delays. MTNC's and Chococam’s legal teams have been striving to annul the deliberation, insisting on a detailed examination of the case.

The controversy stems from a larger dispute involving Bestinver and its South African banker, First National Bank (FNB), a subsidiary of FirstRand Bank (FRB). Following several payment defaults, the bank secured the seizure and sale of several properties mortgaged by Danpullo’s holding. Danpullo’s legal representatives have decried this as asset stripping. In retaliation, they obtained conservative seizures on the bank accounts of MTN Cameroon and Chococam from the Douala-Bonanjo Court of First Instance, despite lacking definitive claims. These companies were targeted because their South African parent companies and FRB share a common shareholder, Public Investment Corporation (PIC). MTNC has strongly opposed this tactic, arguing that it has no direct involvement in the dispute between Bestinver and its South African banker.

During the July 4 hearing, the court reopened discussions, focusing solely on the legitimacy of overturning the deliberation. However, by the July 18 session, the case was once again reserved for deliberation without substantive arguments, exacerbating MTNC's concerns about the court's impartiality. Following the June 6 hearing, MTN Cameroon appealed to the Supreme Court to suspend the enforcement of the Littoral Court of Appeal's decision, which had dismissed their request to reassign the case away from the Wouri TGI. The Supreme Court has yet to issue a ruling.

This ongoing legal uncertainty has sparked "serious concerns" among MTN Cameroon employees, according to a letter sent on July 15 by the National Autonomous Union of Workers in New Information and Communication Technologies (Syntic) to Labor and Social Security Minister Grégoire Owona. The union criticized the TGI of Wouri’s conduct during the hearings on June 6 and July 4, lamenting that MTN has not had the chance to argue the case's merits. Syntic fears that the prolonged legal battle, nearing its two-year mark, could lead to a decision with "significantly negative implications for the company."

Representing workers from telecommunications entities like Camtel, Ericsson, IHS, MTN, and Orange, the union voiced concerns that a detrimental court ruling could jeopardize thousands of jobs and livelihoods. "It would be regrettable if the maneuvers of a few individuals seeking to use the judiciary for their selfish interests were to impact the thousands of jobs we represent and our families' futures," the union stated. As of now, it remains unclear how Minister Owona will respond to the letter, which was received by his office on July 18, 2024.

The court's impending decision will be closely watched, not only for its immediate financial repercussions but also for its broader implications on corporate governance and judicial impartiality in Cameroon.