Umthunzi Telecoms Consortium CEO Sandile Zungu confirmed this morning that the group would take legal action against South African transport utility Transnet, as the latter prepares to dispose of a 5% stake in cellular group MTN.
Zungu threatened to sue Transnet after accusing it of reneging on a deal in which Umthunzi all but secured the purchase of 80.4 million MTN shares held by the M-Cell Trust, Transnet`s pension fund, in 2004.
In line with government`s strategy to dispose of non-core assets held by public enterprise, Transnet called for expressions of interest for the purchase of the stake, which, at that time, was said to be worth R2.4 billion.
Umthunzi Telecoms was chosen as the preferred bidder in April 2004, leading to negotiations between it and government. However, last year, Transnet CEO Maria Ramos stopped the discussions with Umthunzi, effectively halting the sale.
Zungu, a former Denel director and head of mining group Africa Vanguard Resources, vowed to sue government, but no steps had been taken until now.
This week`s announcement, that Transnet would again attempt to dispose of the MTN share - now worth about R5.22 billion based on MTN`s share price - again cast the spotlight on Zungu, who is adamant legal action against Transnet is imminent.
"Transnet cancelled the agreement. I was astounded by the lack of clarity [regarding the cancellation]," he says.
However, Zungu refused to divulge any further details at this stage, saying he simply did not know the specific details.
Transnet communications GM John Dludlu could not comment on Umthunzi`s pending lawsuit, saying there has been no communication between the two parties since the cancellation of the deal.
For its second attempt at selling the MTN stake, Transnet said it would go directly to market in a book-building exercise, and appointed Deutsche Bank to sell the shares.
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