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Vodacom DRC stake safe
Wednesday, 20 June 2012 00:00
Written by Bonnie Tubbs
Vodacom’s 51% stake in Vodacom Congo, tabled for auction on 3 June is safe – for now.
The Democratic Republic of Congo (DRC) Supreme Court has suspended the mandatory sale of Vodacom’s shares in the African country, “pending the outcome of certain legal proceedings already under way”.
JSE-listed Vodacom’s shares were seized last month – and set to be auctioned off – following a dispute between the operator and former business consultant Moto Mabanga, of Namemco Energy.
Mabanga won a court order against Vodacom, claiming the company owed him compensation for consultancy work he had done for it during 2007 and 2008, relating to Vodacom’s long-standing dispute with its co-shareholder in the country, Congolese Wireless Networks (CWN).
While Mabanga initially claimed a sum of $40.8 million, the appeal court reduced the penalty to $21 million, which Vodacom failed to pay – resulting in the court ordering that its stake be seized and sold via auction.
Vodacom subsequently opposed the forced sale, saying it would appeal at “many levels” to stop it. CEO Pieter Uys said at the time the operator would “not let that asset go”.
Vodacom’s head of corporate affairs, Richard Boorman, says Vodacom welcomes the Supreme Court’s decision to suspend the auction of its shares in Vodacom Congo, adding that the operator supports the intervention “in the interest of due process and transparency”.
Vodacom Congo made its commercial debut in 2002 and currently has 5.6 million subscribers. “Over the past nine years, Vodacom has invested around $500 million in the DRC and built a vibrant business employing approximately 600 people.”
In light of an ongoing skirmish between Vodacom and CWN, the local operator has been examining options regarding the sale of its stake – and consequently exit from the partnership. This process was, however, put on hold while Vodacom launched its appeal to stop the auction.
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