Vodacom South Africa Faces Court Move From BEE Loser

Mergers, Acquisitions and Financial Results

A black consortium that failed to survive the first round of short-listing for part of Vodacom's R7.5bn empowerment deal is taking the cellular operator to court in a bid to halt the process. The Tiger consortium will seek an urgent interdict in the high court on Friday, with Vodacom preparing to defend the action so its long-awaited transformation can continue.

Vodacom spokeswoman Dot Field said the company would defend the action, but she did not clarify the nature of Tiger's objection or Vodacom's defence. Tiger apparently includes attorney Mafika Sihlali, a former legal head of the SABC who left the company last year after an audit highlighted irregular spending of R1,8m.

It also includes Lester Peteni, chairman of Nulane Investments, which holds 31% in Huawei Technologies SA. Other members include thousands of entrepreneurs who run Vodacom's community service telephones, its Vodashop and Vodacom4U franchises. It also represents some of the black staff.

Nobody from Tiger could be reached last week, but spokesman Jacobus van Schalkwyk has previously said its members felt they had been overlooked in the selection process and had voted to take the fight up a gear.

Tiger was among 60 bidders for shares allocated to strategic partners who could add value to the business. The strategic partners will take 45% of the empowerment shares, Vodacom's staff will take 25%, and 30% will be sold to black citizens and black business partners.

Tiger failed to impress the adjudicators, and was quickly eliminated. "They didn't even make it through the first round, and I have no idea what game they are playing," a source said.

Vodacom named Thebe Investment and Royal Bafokeng as empowerment partners.

The Communication Workers Union (CWU) is not involved with Tiger, though a few of its members belong to both organisations. The CWU was also unhappy with parts of the empowerment process, said its president, Joe Chauke.

The union objected to Vodacom suspending two employees who are in Tiger because they were involved in the legal action against the company. Its other gripes include the fact that staff must be with Vodacom for at least seven years to receive any shares, and that a minimum investment of R2500 is required for any citizen buying its shares.

A member of another failed bidding consortium said Tiger had originally asked to be part of his group. His members would have happily worked with the entrepreneurs who ran cellphone booths, he said, but did not want to work with some of Tiger's more prominent members.

He said Tiger bore a grudge partly because all staff would receive shares set aside for employees, while Tiger thought only blacks should benefit. "Their core issue is whether empowerment should benefit all employees or just black employees. The bottom line is they have absolutely nothing to lose," he said.

Business Day