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22 August 2017

Expresso sale, share transfer breaches industry regulations

The Electronic Communication Act, Act 775, 2008, requires telecom network operators to give the National Communications Authority (NCA) thirty days notice before selling or transferring shares or interest to any persons, but Sudan Telecom (Sudatel) has reported selling shares in Kasapa Telecoms without prior notice to the NCA.

Section 5 (2) of the Act states that “A person who has a significant interest in a network operator or service provider shall not sell, transfer, charge or otherwise dispose of that interest or any part of that interest in the network operator or service provider, unless notice is given to the Authority thirty days before the proposed transaction.”

Section 10 (2) also states that “A person who has a significant interest in the holder of a frequency authorisation shall not sell, transfer, charge or otherwise dispose of that interest, or any part of that interest, unless that person gives the Authority at least thirty days notice in writing before the proposed transaction.”

The law is very clear on the procedure for selling, transferring and or disposing of shares/interest in a network or frequency, but Sudatel announced transferring 18% shares in Kasapa Telecom at US$5million in 2013 without informing the NCA.

Subsequently, they also announced that as of September 2016, their shares in Kasapa Telecom was 0%, which means the remaining 82%, which was initially transferred to an escrow agent without the knowledge of the NCA, may have been transferred to the buyer.

NCA Boss, Joseph Anokye

Adom News reached out to the NCA about the transfer of shares in Kasapa Telecom and in their response, the NCA said “We would like to state that the National Communications Authority (NCA) has no records on its files relating to any change of ownership of Expresso/Kasapa as it remains same as per the License.”

The NCA also stated that it has not received any request from Expresso/Kasapa on Transfer of shares or Change of Ownership, adding that if such a request is submitted the due process will follow.

The telecoms regulator however noted that its regulatory mandate extends only to the communications industry in Ghana, but insisted on network operators in Ghana following due process, no matter their status, be they of local or foreign origin.

“While it is true that there may be ripple effects of international corporate activities on our local industries, care is taken to ensure that the Licensed operators duly comply with the relevant License conditions and regulations,” the stated.

But it is also important to note that Section 10(4) of the same law states that “The written approval of the Authority is not required where a sale, transfer, charge or other disposition is the result of an internal re-organisation of a body corporate and does not constitute ultimate transfer of control of a holder but the holder shall, as soon as is reasonably practicable, notify the Authority of the nature and extent of the sale, transfer, charge or other disposition.”

As things stand now, even if the Kasapa Telecom shares transfer was as a result of internal reorganization, Sudatel failed to say so and it has been four years since they sold the 18% for US$5million and yet the NCA has no formal notification of the transaction and who the buyer was.

Meanwhile, Section 13(1a) of the Act states categorically that “The Authority may suspend or revoke a licence or a frequency authorisation where the license or the authorisation holder has failed to comply materially with any of the provisions of this Act.

The NCA however did not state what it intends to do in the case of the Kasapa Telecom share transfer.

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