Vodacom is appealing at “many levels” in a bid to stop a Democratic Republic of Congo court from auctioning its stake in its operator in the African country.
The court has set down 3 June for when the dominant South African operator's stake in the African country will be sold. CEO Pieter Uys, speaking during a teleconference this morning, says the company is appealing at various levels to stop the sale. “We will not let that asset go.”
The auction follows a dispute between Vodacom and 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. The appeal court ordered Vodacom to pay out $21 million earlier this year.
The company's failure to pay the fine subsequently led to the court ordering that its stake be seized and sold via auction.
The legal dispute has halted Vodacom's other efforts to seek a resolution between it and co-shareholder Congolese Wireless Networks (CWN). The parties have been embroiled in a long-standing dispute over a funding agreement in place between the shareholders.
Vodacom hired NM Rothschild to explore options for the DRC business, which included a potential exit from the country, at the end of 2010. Uys says Vodacom had a shortlist of two companies that were keen on its 51% stake, but this process has been halted, while it tries to stop the forced auction.
CWN argued that Vodacom International plundered Vodacom Congo of capital and accused the company of fraud. The Congolese company also accused Vodacom of forcing its DRC operation to pay up to $180 million to satisfy loan agreements with “uncommercial terms and conditions”.
Vodacom lashed out at the accusations, saying CWN made it impossible to find an amicable arrangement. The company officially made its commercial debut in 2002 and currently has 5.6 million subscribers.
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