Telekom Malaysia Denies Offering $200mil for GT Shares

...Telekom Clarifies Report On Ghana Telecommunications Company

KUALA LUMPUR -- Telekom Malaysia Bhd denied that it has offered US$200 million (RM760 million) for its 30 percent shares in Ghana Telecommunications Company Ltd (GT) nor has it filed any arbitration proceedings against the Ghana Government in London, in a statement clarifying an article entitled "Malaysian's Demand $200m for 30% GT share ....They Bought".

Telekom said its interest in GT is held through wholly-owned subsidiary TM International Sdn Bhd, which in turn owns 85.5 percent of G-Com Ltd. Therefore, Telekom's effective interest in GT is 25.5 percent and the cost of investment made in 1997 is US$38 million (RM144.4 million), the statement added.

On May 13, 2002, the Ghana government had indicated to Telekom of its agreement in principle to acquire G-Com's 30 percent stake in GT subject to valuation. To-date, no agreements have been reached between the parties on the terms and conditions of the proposed sale by Telekom.

On June 3, 2002, the Extraordinary General Meeting (EGM) of GT passed a resolution to reconstitute the Board of GT from four nominees of G-Com and three nominees from the Ghana government to three to G-Com and six to the Ghana government. This resolution was passed despite the objection from G-Com whose consent is required under the Company Regulations of GT. G-Com then filed an application in the High Court of Ghana on June 13, 2002, to seek a declaration that the EGM was null and void.

On July 11, 2002, the Ghana government unilaterally terminated the contract of employment of the managing director and appointed an interim management committee (IMC) to oversee and manage the day to day affairs of GT. This effectively renders Telekom's loss of management control of GT. Then on July 31, 2002, the High Court of Ghana dismissed G-Com's application for a declaration to nullify the EGM and on Sept 25, G-Com filed an appeal against the decision.

Telekom said that in protecting its legal rights, it has issued a Notification Claim to the Ghana government on Sept 18 in accordance with Article 7 of the Bilateral International Treaty entered into between the Malaysian government and the Ghana government on Nov 11, 1996. The notice provides for a period of three months from the date of notification for both parties to reach an amicable settlement. Upon the expiry of the above period, Telekom may pursue the dispute by referring the same to international arbitration if the dispute remains unresolved.

In the notice, Telekom formally notified Ghana of the treatment of G.Com's 30 percent shareholding in GT and failure to pay about US$58 million (RM220.4 million) deposit (being the deposit of US$50 million and interest) pursuant to Heads of Agreement dated Aug 10, 2002.

If there is no amicable settlement between the Ghana government and Telekom by Dec 18, 2002, Telekom said it could exercise its legal rights by referring the dispute to international arbitration. Telekom said it would announce further development on the matter at the appropriate time.