Ngcuka or nothing!
Vodacom has blocked political interference in its empowerment deal and instructed key players in the scramble for its R7.5-billion BEE stake to work together, or face losing out altogether.
The board of the cellular network operator this week instructed three empowerment groups that recently pulled out of a joint venture involving former Scorpions boss, Bulelani Ngcuka, to rejoin the Amandla Omoya consortium of which he is part.
Two weeks ago Business Times reported that groups headed by businessman Nkenke Kekana, another by former Eskom chairman Reuel Khoza and a third by businesswoman Anna Mokgokong — which were part of Amandla Omoya — had ditched Ngcuka partly because of “political pressure”.
These groups had applied to Vodacom for permission to pursue the deal with new partners on their own.
Ngcuka’s Vuwa Investments is a key player in Amandla Omoya, which is short-listed with several other consortia for the lucrative deal.
Partners in Amandla Omoya were AKA Capital, a private equity and investment holding company founded by Khoza, Sam Nematswerani and Gary Morolo; Mowana Five Mile led by Kekana, who sits on several boards; and Pan African Telecommunications headed Mokgokong.
These three groups ditched Ngcuka — husband of Deputy President Phumzile Mlambo-Ngcuka — and opted to go solo in a bid to win the deal.
The new ANC leadership, under treasurer general Mathews Phosa, had made it clear to some stakeholders that the deal would not happen as long as Ngcuka was involved.
Ngcuka, a former head of the National Prosecuting Authority, was instrumental in paving the way for new ANC president Jacob Zuma to be investigated for corruption related to the multibillion-rand arms deal.
Business Times this week established that Vodacom instructed the three groups to regroup with Ngcuka’s Vuwa Investments or face being cut out of the deal.
After several meetings last week, Vodacom executives told the groups that only Amandla Omoya would be considered for participation in the deal.
It emerged that stunned executives at the cellular network group first learned about the political in-fighting and how Amandla Omoya had splintered when approached for comment by Business Times two weeks ago.
On Friday, Vodacom’s chief spokesman Dot Field declined to comment about the in-fighting and how her company’s executives and advisers in the deal, Rand Merchant Bank, had been forced to intervene.
“We are bound by confidentiality agreements and cannot discuss the deal,” she said.
Khoza’s AKA Capital and Mokgokong’s Pan African Telecommunications this week reconvened talks with Vuwa Investments. Kekana, the former head of Parliament’s communications committee and regulatory affairs at Telkom, could not be reached for comment.
On Friday, Ngcuka declined to discuss the deal and ructions in the consortium, saying he was bound by a confidentiality agreement.
However, in a desperate bid to save the deal and avoid a massive public relations disaster, Vodacom this week spent about R1-million placing full- page colour advertisements in daily and weekly publications.
In the advert, chief executive Alan Knott-Craig, said Vodacom expected to announce the full details of the transaction in the third quarter of this year — initially the company said it would announce the winning bidder by the end of this month.
The adverts also state that detailed terms of the transaction are being finalised and it is now only scheduled to be announced in the third quarter of this year.
“Vodacom, its shareholders, and RMB are currently running a robust and objective partner selection process to determine the composition of the BEE participants. Final negotiations have not commenced with any particular party or parties.
“All black South African citizens and black-owned entities will be eligible to participate in the transaction through a public share offer.”
According to the Caird Group, an empowerment consultancy, Vodacom was most likely forced to manage the situation very carefully to avoid some very negative public relations repercussions.
Director Paul Janisch said the in- fighting that has unfolded in this particular deal would affect several other BEE transactions that had been temporarily shelved prior the ANC’s national conference in Polokwane in December last year.
Some deals, which were near completion, were put on hold pending the outcome of the party’s conference and the election of its new leadership, Janisch said.
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