Legal battles heat up over Vodacom’s R295-million loans

Vodacom doled out two loans worth approximately R295 million to minority partners in its Congolese company, Vodacom Congo — and over a decade later, these loans are yet to be repaid.

Vodacom owns 51% of Vodacom Congo, while the other 49% is owned by Congolese Wireless Network (CWN) and its various shareholders.

The loans were paid out upon Vodacom’s entry into the DRC. Now, shareholders in African Wireless Inc (AWI) — which owned more than half of CWN — are accusing businessman Alieu Conteh of, among other things, transferring the Vodacom funds to Swiss bank accounts.

Vodacom confirmed to the Sunday Times that CWN had not repaid the loans.

“The two loans were provided to CWN for their working capital needs and had to be paid within a certain period and when they were not paid within the agreed period, Vodacom initiated arbitration proceedings before AFSA [Arbitration Foundation of Southern Africa] and an award was issued in its favour,” said Vodacom.

Vodacom could not provide proof of this award, saying it could not be disclosed due to AFSA rules.

It said it had not yet tried to recover the funds because of “shareholder disputes within CWN.”

Alieu Conteh

Court allegations

These shareholder disputes revolve around allegations that Conteh — a fugitive of justice in the DRC — transferred the Vodacom funds to Swiss bank accounts instead of using them for “their intended purpose.”

Conteh led CWN, Vodacom Congo, and AWI as manager, chairman, and chairman respectively. He was also once a close ally of the Kabila family, which includes former president Joseph Kabila, and current member of parliament Jaynet Kabila.

The wife of Conteh, Brigitte van Geesbergen, represents him in legal proceedings due to the former suffering from early dementia. She claims that Resotel — a company with a 40% stake in CWN — was controlled by the Kabilas.

According to court papers, Firuzi Kalume Nyembwe, an ally of Jaynet, held 60% of Resotel, which then received 40% of CWN in April 2000.

Then, in June 2001 — six months before the creation of Vodacom Congo — Jaynet founded Keratsu Holdings in partnership with Nyembwe and received a stake in Resotel through this company.

This also gave Jaynet and the Kabilas a stake in CWM, and as a result, Vodacom Congo.

It is unclear whether the Kabilas benefited from Conteh’s alleged transfers to Swiss accounts.