JSE-listed Vodacom is awaiting the results of arbitration that should finally settle a long-running dispute between it and its business partner in the Democratic Republic of Congo (DRC).
The South African-based operator has been involved in a dispute over a funding agreement with co-shareholder Congolese Wireless Networks (CWN). Vodacom hired NM Rothschild to explore options for the DRC business, which included a potential exit from the country, at the end of 2010.
The matter, which has dragged on for several years, is now finally set to be resolved as the final hearing at the International Chamber of Commerce, dealing with arbitration, was held last October and Vodacom is now waiting for a decision.
CEO Shameel Joosub says this should bring an end to the dispute, which arose after CWN accused Vodacom International of plundering Vodacom Congo of capital and acting fraudulently.
The Congolese operation also accused Vodacom of forcing its DRC operation to pay up to $180 million to satisfy loan agreements with "uncommercial terms and conditions". While the dispute dragged on, Vodacom stopped investing in the country, and pondered selling its stake.
The DRC operation, which has 7.7 million subscribers, has since become self-funding and, in the year to March, rolled out 3G services. Vodacom Congo made its commercial debut in 2002 and Vodacom has a 51% stake in the entity.
In addition to the funding quarrel, Vodacom has faced several challenges from former business consultant Moto Mabanga, of Namemco Energy. Mabanga took Vodacom to court, in 2010, over its alleged lack of payment for work he did.
Vodacom was ordered to pay out $21 million earlier this year, which it failed to do, leading to a ruling that its stake be seized and sold via auction. The forced sale was subsequently suspended.
Joosub says the company has settled with Mabanga, but cannot disclose either the amounts or the terms of the settlement. He did not answer a question, during the results presentation, as to whether the settlement amounted to an admittance of liability.
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