Vodacom faces BEE lawsuit
Vodacom’s plans to finalise its three-year black economic empowerment (BEE) transaction has hit another snag. Tiger Consortium, one of the losing bidders for the R7.5 billion empowerment deal, filed an urgent court interdict against Vodacom this week.
Two months ago Tiger announced its intention to file a R7.5 billion lawsuit against Vodacom, which was using Tiger components in its BEE transaction. The matter is expected to be heard tomorrow at the Johannesburg high court.
Tiger Consortium, formed in late 2004 by black Vodacom employees, the Vodacom Black Business Partners’ Forum and other broad-based groups, was among six bidders shortlisted from more than 60 consortiums.
Vodacom spokesperson Dot Field confirmed the interdict and said the company would defend the matter.
Vodacom revised its empowerment structure in March to include ordinary South Africans and business partners.
Initially, Vodacom intended to sell shares worth R7.5 billion, which is likely to be between 5 percent and 7 percent of the company, to strategic partners and employees.
The Vodacom Black Business Partners’ Forum has 5 000 members who own Vodacom’s 35 000 community service telephones (CSTs), as well as Vodashop and Vodacom4U franchises.
Vodacom’s announcement irked Tiger’s members, especially the business partners, who are considering switching their CST numbers to rivals MTN and Cell C under mobile number portability legislation.
The interdict comes six weeks after Vodacom selected Thebe Investments and Royal Bafokeng Holdings as BEE partners.
According to sources, Vodacom has suspended several staff members for their active involvement in the litigation.
Jacobus van Schalkwyk, Tiger’s spokesperson, said: “Vodacom is the first South African company to suspend black employees for submitting a BEE proposal to benefit all employees. This goes against the BEE laws of this country.”
Communications Workers’ Union members have threatened to strike if the BEE transaction goes ahead.
Tiger will proceed with its plans to file lawsuits in the UK, where Vodacom’s parent, Vodafone, is based; and in the US, at the UN human rights court.
Vodacom plans to finalise the transaction before the end of the year, but this is likely to be delayed further, depending on the outcome of the case.
Business Report
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