JSE-listed Vodacom may lose its 51% share in its Democratic Republic of Congo (DRC) operation after an appeal court decreed that its majority shareholding be seized.
However, Vodacom says the seizure is on hold pending the outcome of a General Inspectorate of Judicial Services investigation into a recent court ruling and the resultant seizure of the asset after Vodacom lost its court bid.
Former business consultant Moto Mabanga, of Namemco Energy, took Vodacom to court over its alleged lack of payment for work he did. The appeal court ordered Vodacom to pay out $21 million earlier this year.
Waiting game
Vodacom says it received confirmation yesterday that the General Inspectorate of Judicial Services has initiated an investigation into the circumstances surrounding the ruling, which places the seizure on hold.
“The effect of this investigation as we have been advised is that the order for either the payment of the $21 million or purported attachment of shares cannot be enforced until the investigation has been completed.”
The ruling stems from a protracted dispute between Vodacom over work Mabanga had done for the firm during 2007 and 2008.
Mabanga sued Vodacom in 2010 for unpaid fees following consultation and arbitration over a shareholder dispute with Congolese Wireless Network (CWN), which owns the other 49% of Vodacom's DRC operation.
Mabanga successfully sued Vodacom for $21 million in unpaid fees, and the court ruled on 25 January that Vodacom must pay. Earlier last month, Vodacom lost a bid for a stay of execution against the order.
At the time, Mabanga told ITWeb he would “attach whatever [I] can” in an attempt to recover the money awarded to him by the court, if Vodacom refused to pay the fee. On Wednesday, the court issued the operator with papers declaring its DRC stake seized.
The relationship between Vodacom and CWN has been precarious since the latter operator's commercial debut in 2002. ITWeb reported in January that, amid the shareholder dispute, Africa's largest cellphone operator MTN has shown interest in Vodacom's DRC unit.
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