Nkosana Makate, inventor of the ‘Please Call Me’ service, says Errol Elsdon’s threat to sue him for defamation is baseless, as the long-running legal matter takes yet another turn.
Elsdon yesterday issued a press release saying he “will not be branded a criminal for honouring a contract,” in response to Makate’s statements that Elsdon’s claim – through his British Virgin Islands-registered company Black Rock Mining – to 40% of the inventor’s confidential settlement with Vodacom is “fraudulent”.
This is the latest turn in litigation that has dragged on for almost two decades over Makate’s invention of the service, which allows users who have run out of airtime to send a USSD code to another cellphone number, requesting a call back.
Makate has branded Elsdon’s threatened defamation lawsuit as stillborn, saying a civil fraud claim is already before the High Court, assigned to Judge Lenyai, in which Elsdon is a respondent.
“There is no need for Elsdon to sue me – all he must now do is respond in person to those court papers as a respondent,” says Makate. A separate criminal complaint has been laid but the National Prosecuting Authority has yet to decide whether to prosecute.
Took forever
Vodacom settled a long-running legal matter over whether Makate was entitled to a share of the profits from the ‘Please Call Me’ invention last November through a confidential agreement after the matter had been through numerous courts several times, including the Constitutional Court.
Peter Takaendesa, chief investment officer at Mergence Investment Managers, has estimated the settlement at around R660 million, based on Vodacom’s decline in earnings per share disclosed in a trading update ahead of its interim results. Elsdon claims the figure is R1 billion.
In the release, Elsdon says: “Much has been said about how the ‘Please Call Me’ matter ended, and about Makate as the ‘lone underdog’ who took on a corporate giant. Far less has been said about how the claim began: unfunded, untested and stalled, until someone was prepared to pay for it and to carry the risk of losing the funding if the case failed.
“I was willing to be called many things when I agreed to fund this case. A criminal was never one of them. I will not be branded a criminal for honouring a contract, and I will answer that accusation where it belongs: in court.”
Elsdon adds: “I do not begrudge Makate a cent of his success… But it did not come from nowhere. It came from a reworked case, a legal team, and money put up by people who were prepared to lose every cent of it.”
Branding the man who funded the legal action as a fraudster “is the act of someone who would rather rewrite the story than honour the agreement that made it possible,” says Elsdon.
Summing up
Black Rock claims it is entitled to 40% of the settlement under a written funding agreement concluded with Makate in 2011.
In court papers, Black Rock says a total of R4.4 million was raised and applied to fund the litigation, including R2.4 million paid to Makate’s lawyers for fees and disbursements, with the balance spent on counsel, expert witnesses and litigation expenses.
Makate disputes this, arguing Black Rock contributed little more than around R8 000 in 2014. The inventor has also argued in court papers that the funding agreement was cancelled in 2015, a position Black Rock disputes.
Both claim victory following a 2020 arbitration ruling:
- Makate because a purported transfer of the funding deal from Black Rock to another, tangentially associated company, Raining Men, was found to be fraudulent because his signature was forged.
- Black Rock Mining because it was found to be the only validly nominated entity under the 2011 funding agreement.
Makate also states that Black Rock has no basis to pursue the claim because the company was deregistered between 2014 and 2021, before later being restored.
Ghost company
In another twist, Makate has filed papers that seek to prove that Black Rock never genuinely operated as a legitimate funding entity, which he says would destroy its attempt to take him to arbitration to secure 40% of the settlement reached with Vodacom last year.
The discovery process in the latest litigation will focus on forcing Black Rock and related entities to produce financial statements, bank accounts and proof of payments allegedly made to fund his case against Vodacom, says Makate.
Sinenhlanhla Mnguni of SN Mnguni Inc, Black Rock’s attorney, said the firm has instructions to defend Makate’s claims that Black Rock only existed on paper “vigorously as they remain steadfast in the assertion that they have a valid claim against Mr Makate emanating from the funding agreement concluded between the parties”.
Last December, Black Rock lost its bid to urgently freeze the money Makate won, based on the deal it says it struck to help fund the ‘Please Call Me’ creator’s court battle.
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