Petition Against MTN Nigeria Communications

Dear Sir: MTN Communication Nigeria (MTNN) on April 2007 approached Seed Media Limited (SEED) (exclusive franchise holder and representative of TLC Marketing PLC) following a presentation made by the principal - TLC Marketing PLC, to design and manage her customer loyalty programme. The contract sum was for N300m (4million TLC points at N75 per point) within a year terminating on March 31st, 2008.

This all inclusive fee was for the design, management, implementation and provision of travel leisure and lifestyle rewards to agreed customer segment. Exclusive of VAT.

Under the scheme, qualifying subscribers were to be offered varying lifestyle rewards based on spent. During this period, MTNN and SEED agreed to phased payments. These payments were for 5 equal tranches of N60m each. As agreed, SEED was requested to provide an Advance Payment Guarantee (APG) or bond from a reputable local bank or insurance company for the first tranche only. This was as a result of the newness in their partnership and based on MTN standard procedure. This was subsequently produced, work completed and bond released. See attached released letter by MTNN. Subsequent payments were also released in tranches as work was completed by SEED (representative of TLC Marketing). Four (4) out of the agreed five (5) tranche payments were made as agreed. During this period of ‘work and be paid’, MTNN continued to push for NCC’s approval to enable her launch the programme. On her part, they implored TLC to continue work as approval was being sorted. Unfortunately, the programme launched dates had to be shifted severally due to MTN’s inability to obtain approval. This inability to secure NCC approval was also reported on MTN group’s site. See the link - www.mtn-investor.com/mtn_ar08/book1/hwp_wea.html.  You will recall that NCC had placed a blanket ban on GSM operators due to poor network quality in 2007.

However, four months after the expiration of the contract and suspecting that the full contract sum had been paid, TLC Marketing sent a complaint to MTNN that have not received the full payment.  Consequently, MTNN requested that the campaign/programme be put on hold pending the resolution of the issues between SEED and TLC. Since the issues were unresolved, MTN proceeded to discuss with TLC Marketing directly causing a fundamental breach in the agreement. This discussion couldn’t yield much result as TLC had failed and administrator appointed; hence MTN reverted to SEED and demanded that all monies paid be returned. Efforts by SEED to continue the programme was halted. According to MTN, SEED didn't have the intellectual property right for the campaign and would rather not have TLC – the principal sue them. They noted that the agreement was executed purely on the strength of TLC’s credential and competences across the globe. This settlement process continued. Contrary to opinion, the failure of TLC in other new markets were know to MTNN as the son of the Chief Marketing Officer – Mr. Bola Akingbade, also worked in TLC Marketing PLC until the failure resulted in his sack. This failure was also the issue, SEED tried to avert. As Mr. Akingbade knows, TLC was sued in Egypt by Nokia, in Bahrain by HSBC and AMEX in Malaysia

The matter was subsequently referred to arbitration. Lawyers to both parties met and decided on how to choose the Sole Arbitrator. A letter was sent to Institute of Arbitrators and in a letter signed by Chief Bayo OJO (Chairman of the Institute); Mrs. Funke ADEKOYA (SAN) was appointed Sole Arbitrator. Mrs. Adekoya wrote to accept her appointment and fixed a date for preliminary hearing. While this was going on, MTN through her Executive Director, Corporate Services, Mr. Akinwale Goodluck and Mrs. Oghenerume Rotimi (General Manager, Commercial Legal) petitioned the Economic and Financial Crime Commission (EFCC). They requested amongst other things for the agency to ‘assist MTNN in recovering monies from SEED’. The commission swung into action immediately detaining top management staff of the company for 6days, seized all official cars, searched and collected working computers, cheque books, other document from the MD’s house and office, etc. EFCC based on the instigation from MTN have continued to invite, harass Seed Media officials requesting that the monies be returned otherwise a criminal charge will be placed on a PURELY CIVIL CASE

In a suit filed by SEED against MTNN and EFCC, EFCC refused to appear before Justice Binta Murtala-Nyako twice necessitating the judge to fix for January 13, 2011 for her judgment. Even though the commission has refused to appear before Justice Nyako, they have continued to harass members of staff of SEED

While we are seriously disappointed at the action and approach of MTNN in a civil case, we consider it an unprofessional approach by such a telecommunication giant to destroy local companies by instigating EFCC. If Seed Media was an international company, will they resort to EFCC other than the court process? Is the disregard for the Arbitration which they initiated not a further disrespect to our judiciary system? Why will the telecommunication giant instigate EFCC against the company for her inability to secure launch approval from NCC? Did SEED fail to deliver on the terms and scope of work during the contract period?

We hereby request that you use your good office to check the excesses of these foreign organizations and direct them to refund our balance N60m based on the terms of agreement.

Yours faithfully
For Seed Media Limited

MANAGEMENT
Cc: President, Commander of Federal Republic of Nigeria
       Attorney General and Minister of Justice
       Chairman, Economic and Financial Crime Commission
       Chairman, MTN Group, South Africa
       Senate President
       Hon. Speaker, House of Representatives
       Chairman, Senate Committee on Communications
       Etigwe UWA (SAN), Streamsowers & KoHN