The fallout from Telkom’s disastrous Nigeria investment continues. The JSE-listed telecommunications group revealed on Friday in its annual results that it has issued a summons on the listed Blue Label Telecoms, subsidiaries of the company, as well as on a former executive of Telkom claiming an amount of US$528m (R5,2bn).

Telkom says the damages claim is based on a “breach of a duty of care and misrepresentations made by Blue Label” at the time a “super dealer agreement” was concluded between Blue Label subsidiary African Prepaid Services and Telkom’s former Nigeria subsidiary, Multi-Links. The agreement was signed in December 2008.

Telkom is also claiming $6m from a former senior executive of the company for “damages suffered as a result of certain irregularities”. Telkom has not named the executive in its annual results.

It says the summons on the former executive is based on two claims: one for $1m, which it says was the amount it “was compelled to pay to a third party as a consequence of the defendant acting outside his authority by signing a financial guarantee binding Telkom jointly and severally for the obligations of Multi-Links; and another for $5m “arising from the defendant’s conduct while at Multi-Links in authorising a telecoms operator to earmark and make a payment of $5m to a third party instead of to Telkom”.

The company says the second claim involved payment that was due to Telkom in terms of a network traffic termination agreement.

In addition, Multi-Links is claiming “several million US dollars” in damages, Telkom says. The Nigerian company has asked that as part of the relief sought that the court declare the super dealer agreement with African Prepaid Services, which has a 10-year term expiring in 2018, be treated as invalid from the outset.

Furthermore, Telkom is claiming $20,5m from Multi-Links related to the provision of resources and an interest-free loan as well as legal costs.

The latest development comes on top of arbitration proceeding between African Prepaid Services Nigeria (APSN) and Multi-Links. APSN filed a claim of $481,2m (later reduced to $457m). Multi-Links filed a counterclaim of $123m.

Telkom sold its shareholding in Multi-Links to HIP Oils Topco in October 2011. In terms of an indemnity contained in the sale and purchase agreement, Telkom is liable for all amounts in excess of $10m in respect of the claim between APSN and Multi-Links.

Arbitration hearings are set to take place in the first quarter of next year, although Multi-Links has applied to the high court to stay the arbitration hearing pending the outcome of the damages claim against Blue Label.

Blue Label released a statement to shareholders on the JSE’s Sens news service at lunchtime on Friday saying its board is “confident that the attempts which have been made to frustrate the continuation of the arbitration proceedings will be overcome and that the claims made against Blue Label, its subsidiaries and representatives will be successfully defended”.