Parliament whips ICASA

By Paul Vecchiatto, ITWeb Cape Town correspondent

Cape Town, 19 Jun 2009

“It was not a proper decision, we are filled with remorse and regret, we fell off our horse; it was a bad experience,” Independent Communications Authority of SA (ICASA) chairman Paris Mashile said yesterday about the Vodacom listing debacle.

Mashile's words of contrition, which were repeated several times, related to the berating the Parliamentary Portfolio Committee delivered to ICASA for its last-minute change of mind in May. The telecommunications regulator's decision almost derailed the R20 billion listing of the country's largest cellular network operator.

ICASA appeared before the Parliamentary Portfolio Committee on Communications yesterday, to deliver its annual budget and strategy plans. However, soon afterwards, politicians from all parties turned their questioning to how ICASA councillors changed their minds and caused the country great embarrassment.

Independence Day

During the questioning, it emerged ICASA had not followed its own procedures of instructing lawyers to act on its behalf. This has raised a question over who will pay the costs of the action. ICASA acknowledged it had not received such a bill from Vodacom's lawyers yet, but expected it.

The issue relates to ICASA initially agreeing with Vodacom, after the regulator had received two independent legal opinions, that it only needed to be notified about last month's Telkom/Vodacom unbundling and listing, and that its approval was not necessary.

However, 48 hours before Vodacom's maiden listing, ICASA changed its mind. This resulted in a Sunday court case where the Gauteng North High Court ruled in favour of letting the listing proceed, barely 12 hours before it was due to take place.

“What does this 'independence' mean?” committee chairman Ismail Vadi (ANC) asked, referring to ICASA's full title: the Independent Communications Authority of SA.

He continued: “I don't believe there is something [such] as absolute independence. Our former president, Kgalema Montlanthe, signed the deal on behalf of the government. Now ICASA decides to contest this and then to do so in support of Cosatu [Congress of South African Trade Unions] and an NGO [non-governmental organisation].”

Mashile said he was not present at the meeting of councillors when the decision was taken, as he was in Lesotho. ICASA CEO Karabo Motlane said he was not present either, and that he was only informed about the decision after ICASA's general manager for legal affairs had been instructed by the councillors who took the decision.

“Normally, the councillors would issue an instruction via my office, but this did not happen,” Motlane said.

Corridor networking

The issue for Vadi and the other MPs is that, if proper procedure was not followed, then, in terms of the Public Finance and Management Act, certain councillors, or the CEO, could find themselves personally liable for the legal costs the court awarded Vodacom.

Juli Kilian, Cope communications spokesperson, asked if the proper quorum had been constituted to make such a decision. “I want to know if they understood the risk involved in making the decision,” she said.

Only six of the councillors were present during the fateful Friday morning meeting. They were Marcia Socikwa, Thabo Makhakhe, Fungai Sibanda, Robert Nkuna, Mthobeli Zokwe and Brenda Ntombela.

According to Motlane, he was in the building but not present at the meeting, “...that took place in a corridor and I was only told afterwards”.

Motlane's assertion that he did not authorise the funds for the legal action was partly countered by ICASA GM for legal affairs Stanley Namaregane, who said he soon alerted Motlane to the fact after being instructed by the councillors.

The committee then suspended this part of the hearing to deal with other ICASA issues and held the rest of the hearing into the Vodacom decision in camera.

After the meeting ended, Vadi told ITWeb: “Parliament expressed a clear view that it is very concerned over the legal costs implication and the fact that ICASA needs to clean up its procedures.”