KUALA LUMPUR (March 29): The High Court (commercial division) on Tuesday (March 29) granted an injunction preventing Celcom Mobile Sdn Bhd’s 5.25 million shares in Tune Talk Sdn Bhd from being included in the sale of Celcom Axiata Bhd to Digi.Com Bhd.
The injunction was sought by three shareholders of the mobile virtual network operator (MVNO), namely Padda Gurtaj Singh, East Pacific Capital Pte Ltd and Tune Strategic Investments Ltd.
The court action concerns the proposed sale of Axiata Group Bhd's entire shareholding in Celcom Axiata to Digi.Com as part of the proposed merger of both telcos' businesses.
The injunction was granted by Judicial Commissioner (JC) Ong Chee Kwan, who also ordered Axiata Group and Celcom Axiata to pay costs of RM25,000.
Counsel K Shanmuga, representing Padda Gurtaj, East Pacific Capital and Tune Strategic Investments, confirmed the outcome of online proceedings on Tuesday morning when contacted by theedgemarkets.com.
The three plaintiffs who filed the action in September last year collectively own 30.02% of Tune Talk, and have applied for Axiata Group to be prohibited from including its 5.25 million Tune Talk shares representing a 35% stake in the MVNO in the proposed merger with Digi.Com.
The 35% stake is held via Celcom Mobile, a wholly-owned unit of Celcom Axiata, which is in turn a wholly-owned unit of Axiata Group.
Padda Gurtaj, East Pacific Capital and Tune Strategic Investments had named Jason Jonathan Lo, Tune Group Sdn Bhd, Datuk Seri Kalimullah Hassan Masheerul Hassan, Axiata Group, Datuk Lim Kian Onn, Celcom Axiata, Celcom Mobile, Christopher Mark Anthony Lankaster and Tune Talk as defendants.
JC Ong — who last Feb 9 heard Axiata Group and Celcom Axiata's bid to strike out the suit filed by the three shareholders — also dismissed the application by Axiata Group and Celcom Axiata on Tuesday. This was also confirmed by Shanmuga.
Celcom Axiata and Axiata Group filed their application to strike out the suit last Oct 11.
According to the originating summons filed last year, the plaintiffs are also seeking an injunction against Celcom Axiata or its agents from amending, varying or otherwise changing the terms under which Celcom Axiata provides network services to Tune Talk.
The plaintiffs contended that changes in the control over Celcom Mobile will allow Digi.Com, which was named as a competitor in Tune Talk’s 2008 shareholders’ agreement, to gain an indirect shareholding in the latter.
This, the plaintiffs said, goes against Tune Talk’s 2008 shareholders’ agreement.
The plaintiffs also argued that the deal will significantly reduce Tune Talk’s total addressable market, of which 50% will be co-owned by the merged Celcom-Digi entity.
Tune Group, which is controlled by Tan Sri Tony Fernandes and Datuk Kamarudin Meranun, is said to own a 25.14% stake in Tune Talk.
The proposed Celcom-Digi merger includes the 35% stake Axiata Group/Celcom Axiata have in Tune Talk, but left out the remaining 65% stake in the latter held by other shareholders.