MTN has been hauled to the SA Human Rights Commission (SAHRC), over claims of discrimination, by a black empowerment consortium, which wants the telco investigated for allegedly violating the Bill of Rights when conducting business.
Eliovect, the black economic empowerment outfit, lodged a complaint with the human rights watchdog in July for alleged discrimination, claiming MTN backed out of an agreed contract to distribute airtime.
The consortium now wants the human rights watchdog to investigate the telco’s alleged behaviour when conducting business with black-owned companies.
MTN has denied any wrongdoing, saying the approvals held by Eliovect were “not secured and therefore the deal was not concluded”.
The mobile operator has since submitted a detailed response to the SAHRC.
Eliovect has been wrangling with MTN and other players in mobile business since July last year over the alleged monopoly of prepaid airtime distribution.
The consortium reported the alleged monopoly to the Competition Commission (CompCom) against MTN, Blue Label, Shoprite, Pick n Pay, Woolworths, Spar, OK Franchises, Massmart Group and Steinhoff International.
However, the CompCom concluded: “The allegation cannot be sustained because the commission could not find any exclusivity in the distribution agreements between MTN or Cell C and Blue Label.”
In the latest complaint to the SAHRC, Eliovect claims MTN backed out of an agreed contract because of previous disagreements between the parties.
MTN and Eliovect chairman Sello Phakoe have had a tumultuous relationship in recent years.
In 2016, Phakoe’s other company, New Age Holdings, and MTN reached a multimillion-rand out of court settlement over another contract.
According to documents seen by ITWeb, New Age Holdings secured a contract through tender with MTN to supply laptops to its consumers through its branded channel. Phakoe claims a plan was hatched afterwards “to completely remove New Age Holdings from the contract even though it was the only service provider with a valid contract” which led to litigation, resulting in the out of court settlement.
In the current complaint to SAHRC, he says: “Our concluded contract is yet to be returned. The Competition Commission matter has been concluded and we would like to know if MTN intends to cancel this contract, or perhaps have an alternate plan in place.”
Phakoe tells ITWeb: “We were advised that the main reason there was no progress on our new contract was that we are litigious, without realising that the legal action taken back then was indeed as a last resort for us.
“The fact that it remains an albatross around our neck is neither in the spirit of our settlement agreement nor fair at all. We have not been requested to present our version of events and yet we are administratively judged and sanctioned accordingly.”
He adds: “All we request is the extension of fair treatment and the opportunity to add value to both MTN and ourselves by delivering on the contract.”
No MTN guarantees
In response, Jacqui O’Sullivan, executive for corporate affairs at MTN, says in 2016, MTN engaged in discussions with Phakoe, regarding a potential distribution agreement between MTN and Eliovect.
“Over the months, various discussions took place relating to Eliovect’s capabilities, as well as the potential commercial terms that MTN could offer to Eliovect to distribute prepaid products on behalf of MTN. This culminated in the execution of a term sheet between the parties, which resulted in the subsequent negotiation of an informal prepaid distribution agreement between Eliovect and MTN,” explains O’Sullivan.
“The term sheet inter-alia set out the proposed commercial terms on a high-level basis and further confirmed that no agreement would come into place until such time as MTN’s executive and board of directors approved of the transaction.”
Following discussions on the matter, O’Sullivan says, MTN’s exco did not approve the deal.
“It is important to note that MTN had no legal obligation to complete the proposed transaction as the draft agreement was quite clear that it was subject to further approvals. Those approvals were not secured and therefore the deal was not concluded.”
According to O’Sullivan, MTN has consistently communicated with Phakoe on this matter and has maintained a professional and courteous approach in all its dealings with him.
In response to the statement that this matter been taken to the SAHRC, she says: “MTN stands by its decision, which was made in the best interest of MTN, its employees and its shareholders. The decision not to do business with Eliovect was based purely on commercial reasons and we are confident that MTN has handled this matter appropriately.”
At the time of publication, SAHRC Gauteng head Buang Jones had not responded to ITWeb’s request for comment.
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