Vodacom could lose control of Congolese unit as dispute rumbles on

29 Mar 2012

South Africa’s Vodacom Group may lose control of its wireless unit in the Democratic Republic of Congo, Bloomberg reports, after a local court ordered its shares be confiscated to settle a long-running financial dispute with a consultant. Earlier this month Vodacom was ordered to pay former consultant Moto Mabanga USD21 million after losing a court appeal over a so-called ‘success fee’ dating back to 2008. Mabanga, who was hired by the company to assist in negotiations with co-owner Congolese Wireless Networks (CWN) between 2007 and 2008, was paid USD2.8 million for the work, but sued the company for a further USD40.8 million that he believes he is entitled to.

Vodacom has maintained its reluctance to adhere to any legal decisions dictated by the Kinshasa court, indicating that the initial contracts between Vodacom and Mabanga stated that any disputes arising would be resolved under South African jurisdiction. However, this week the commercial court in Kinshasa issued an order for Vodacom’s 510,000 shares in Vodacom Congo to be seized. Pieter Uys, CEO of the Vodacom Group, commented: ‘Vodacom’s appeal against the judgment is still before the court and is due to be heard. We are aware of the confiscation order. Our lawyers are looking into it and will respond … We have paid [Mabanga] in terms of the two contracts we had with him and there are no outstanding payments’. For his part, the consultant told Bloomberg: ‘The court is handling the attachment process and will determine how many shares must be sold in order to pay me. That’s because nobody knows their value as the company is unlisted. It has been a long struggle.’

Congo, Dem. Rep., Vodacom Congo (DRC), Vodacom Group