Attempts to derail Vodacom's listing on the JSE flies in the face of government's support for the transaction, the mobile operator revealed this morning.
Vodacom CEO Pieter Uys says government still backs the sale of an additional 15% of Vodacom to Vodafone, of which listing on the Johannesburg bourse is a requirement.
“Government has irrevocably agreed to the transaction with Vodafone. It gave Vodacom its full support in defending the legal action by ICASA [Independent Communication Authority of SA] and Cosatu over the weekend.”
The deal, originally mooted by Thabo Mbeki's administration, got the final go-ahead from interim president Kgalema Motlanthe late last year. Government's blessing relied on several conditions being met, with job security for employees being one.
Hours before Vodacom's listing, judge John Murphy dismissed the application, with costs to the regulator and Cosatu, which saw the mobile business debut on the exchange yesterday.
The deal has never enjoyed the support of the trade unions, which are demanding a voice in the decision to sell Vodacom to UK-based Vodafone. They are also concerned that members may face job losses if the transaction goes ahead.
Uys says the company will adhere to the condition set by government to secure jobs. “If the job losses are their concern, they can be sure there will be none relating to this transaction.”
Government now owns 13.8% of Vodacom and has agreed to hold its shareholding for a year.
Government has irrevocably agreed to the transaction with Vodafone.
Pieter Uys, CEO, Vodacom
Cosatu has one more card to play, with legal action pending against ICASA's original approval of the deal. The union contests that ICASA made its original ruling under the now-defunct Telecommunications Act, which limited competition in the market.
The new Electronic Communications Act does not have ownership and control regulations written in, and controls over ownership may no longer be needed, given the growing competition in telecoms.
Vodacom says it is prepared to contest Cosatu's legal action and will face the courts when the time comes. “We have all the ammunition we need to resist Cosatu's legal complaint.”
A date for the court hearing has not yet been set, and could be months after the transaction has been completed.
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