A Semana has learned that the appeal to the ICSID by PT Venture was submitted on March 18 and has as its foundation Portugal Telecom’s intention to maintain its position in the chairmanship of Cabo Verde Telecom’s Executive Commission, which was placed in doubt with the rescission of the strategic partnership accord by the government.
Indeed, the choice of the ICSID was anything but naive, considering the fact that the World Bank does not normally encourage the “nationalization” of companies that have already been privatized. Also in question is the issue of the legal security of investments in Cape Verde.
PT Venture is hoping for the support of the International Center for Settlement of Investment Disputes and the International Chamber of Commerce of Paris in order to ensure the weight of its 40% share in CVTelecom. The company alleges that defending respect for the accords and for shareholders’ rights is fundamental in preserving the country’s legal security and showing investors CVTelecom’s commitment to best practices in terms of corporate governance.
With 440,000 mobile telephone clients and 64,000 land line clients, CVTelecom is a company that over the last six years has contributed to Cape Verde’s economy with the payment of more than 150 million euros in taxes. PT Venture claims that, in order to maintain this contribution to the well-being and development of the country, it is fundamental for accords negotiated between shareholders to be respected – a principle that does not allow for the unilateral breaking of clauses, at the risk of generating instability for those investing in the Cape Verdean economy.
In late December, the State of Cape Verde unilaterally broke the strategic partnership accord with Portugal Telecom, an accord that had been in effect since the privatization of the Cape Verdean telecommunications company, CVTelecom, in 1996. The government justified its rescission saying that the Portuguese company violated the shareholding and strategic accord by selling part of the stake it held in CVTelecom without the prior authorization of Cape Verdean authorities.
Following the same logic, Tuesday’s general assembly was intended to change the company’s management structure.