CWN controlling shareholder sues Vodacom Group for USD14bn

19 Nov 2015

Vodacom Group is being sued for USD14 billion by Alieu Conteh, the controlling shareholder of Congolese Wireless Networks (CWN), which is the minority partner of Vodacom’s Democratic Republic of Congo (DRC) subsidiary, Vodacom Congo. According to Vodacom Group’s interim report for the six months ended 30 September 2015, Conteh is seeking to invalidate a court decision removing him as statutory manager of CWN, while making an ‘unsubstantiated claim’ for the USD14 billion against Vodacom ‘for its alleged role in helping to undermine Conteh’s position as former statutory manager.’

Meanwhile, Bloomberg cites Tshepo Ramodibe, Vodacom spokesman, as commenting: ‘Vodacom International Limited is opposing Mr Conteh’s claim, which we believe is unfounded and unsubstantiated … Our view is that Mr Conteh’s action is primarily a challenge to the decision of the Commercial Court of Kinshasa/Gombe which removed him as a co-manager of CWN.’

As noted in TeleGeography’s GlobalComms database, in 2009 CWN – which owns 49% of Vodacom Congo – accused Vodacom of charging excessive fees and interest on network expansion loans made by the Vodacom Group to its DRC subsidiary, and demanded that the South African company pay back USD166 million. Vodacom subsequently proposed a move to dilute CWN’s shares in Vodacom Congo; CWN instead proposed a liquidation or sell-off to a third party, which Vodacom in turn rejected. In March 2010 the matter was referred to the International Chamber of Commerce (ICC) in Brussels for arbitration. In Vodacom Group’s FY2015 integrated report, the operator confirmed: ‘The Group is in ongoing discussions with the shareholders of CWN with the purpose of finding an amicable settlement to this matter.’

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