Legal Showdown: French Firm Wendel Drags American-Nigerian Mogul Sam Darwish’s IHS to Court

IHS Holding, a prominent telecommunications infrastructure company headed by Sam Darwish, a Nigerian-American entrepreneur, is presently entangled in a legal dispute with Wendel SE, a French investment group. The conflict stems from a disagreement between the two entities regarding the management of the company.

Wendel SE, acting through its subsidiary Oranje-Nassau Developpement SCA FIAR, currently owning an 18.8-percent share in IHS, is pushing for a vote on various governance proposals that were not originally presented during the shareholders’ meeting held in June.

As a result of this situation, legal action was initiated, and on June 30, the Grand Court of the Cayman Islands issued a summons in response.

The cause of the claim

Based on the court document, Wendel SE claims that IHS violated section 8 of the shareholders’ agreement by neglecting to inform all shareholders about the proposed resolutions and failing to present them for voting at the Annual General Meeting (AGM).

The lawsuit highlights the persisting conflict between IHS Holding’s management and its primary shareholders, which has arisen due to the substantial decrease in the company’s value subsequent to its initial public offering (IPO) in New York last year.

Around three weeks ago, IHS Holding reached out to JPMorgan Chase & Co for guidance in managing the shareholder disputes and protecting its management autonomy.

As MTN Group and Wendel collectively possess approximately 44.4 percent of IHS Holding, there are concerns that alterations in governance could potentially facilitate unwanted acquisitions. Nonetheless, Wendel vehemently refutes any intention of orchestrating a takeover and accuses IHS Holding’s board and management of employing deceptive tactics to mislead.

During the first quarter of 2023, IHS Holding encountered a significant decline in profit, experiencing a drop of 49.3 percent from $15.1 million to $7.66 million. However, in the same period, the company observed a notable increase in revenue, with a surge of 35.1 percent from $446.13 million to $602.53 million.

Despite the decline in profits, IHS Holding maintains a positive outlook and remains optimistic about reaching its goals for 2023. With its expansive tower network and strategic acquisitions, the company continues to play a crucial role in the global telecom infrastructure landscape.

Under the leadership of Darwish, IHS Holding has experienced modest growth. The company’s total assets have reached $6.49 billion, and there has been a slight reduction in retained losses, which now amount to $3.3 billion.