Vodacom says a lawsuit against it in the Democratic Republic of the Congo (DRC), worth R198 billion, is "unfounded and without merit".
Alieu Conteh is suing Vodacom International Limited (registered in Mauritius) as well as Vodacom Congo in the commercial court of Kinshasa/Gombe for $14 billion (R198 billion).
Vodacom disclosed what it called "an unsubstantiated claim" in its interim results announcement 10 days ago.
"There has been no change in regards to this matter since the interim results were published. We reiterate that Vodacom International Limited is opposing the action and view the claim as unfounded and without merit," Vodacom executive head of corporate affairs Tshepo Ramodibe told ITWeb.
Conteh is the controlling shareholder of Congolese Wireless Network (CWN), a company incorporated in the DRC. CWN is also a minority shareholder in Vodacom Congo.
"The proceedings seek to invalidate a court decision to remove Conteh as statutory manager of CWN, as well as the liquidation of Vodacom Congo and its payment of various sums to CWN and Conteh," according to Vodacom.
Conteh is seeking the hefty pay-out from Vodacom for "its alleged role in helping to undermine Conteh's position as former statutory manager".
"The group's view is that Conteh's claim is without merit."
Vodacom's share price was only marginally down at the close of trade yesterday after the news surfaced via a Bloomberg article.
In early trade today, the stock had recovered and was around 1.7% up, trading at around R150 a share in mid-morning trade.
Vodacom's share price has gained over 16% this year and the telecoms giant has a market cap of R219.4 billion.
Tougher regulation in Africa
In its interim results, Vodacom also alluded to regulatory changes affecting some of its African operations. Vodacom says the implementation of customer registration requirements in the DRC, Tanzania and Mozambique is under way.
"In each country, the industry is engaging with authorities to improve the process to ensure customer registration," Vodacom said in its results announcement.
The deadline for new regulation in Mozambique has been set for 28 November. No date has been set in the DRC or Tanzania but the group says it is continuing to actively register customers and "authorities continue to monitor compliance with regulations as no deadline is currently set".
Vodacom's key rival, MTN, got itself into hot water late last month for failing to disconnect over five million customers with unregistered SIM cards in Nigeria. It is facing a R74 billion ($5.2 billion) fine in Africa's biggest economy for the regulatory breach.
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