Altech’s Venter in war mode
Altech is considering legal action to challenge the recent R1.4-billion merger of MTN South Africa and Verizon South Africa, just weeks after ditching a challenge at the Competition Tribunal.
Craig Venter, Altech’s outspoken chief executive, may be called a troublemaker, a maverick or just overzealous, but he said the company had better things to do than start fights merely for publicity.
In a candid interview with Business Times, Venter voiced his dissatisfaction with the recent deal involving MTN South Africa and the company it acquired, Verizon. Venter was to have taken the matter to competition authorities but pulled out two days before the start of the hearings.
Venter also voiced his frustration with the state of the telecommunications industry, and blamed restrictive licence regulations for the high prices that consumers pay in phone and data charges.
Venter felt that the recent 100% acquisition of Verizon by MTN could result in an unfair advantage for the cellphone operator.
He said: “As part of moving up the telecoms chain to operator level, we, together with the industry, were invited to participate in the potential acquisition of Verizon SA. The process was handled via a public auction last year.
“A number of players were asked to bid. Vodacom, MTN, Altech and a number of different players were part of that.”
Venter said the merger was now subject to a legal review, and that Altech was exploring legal options: “It is unfortunate that the merchant bank that handled that transaction, Macquarie, has a BEE partner in the form of J&J Group.
“Macquarie got the mandate to sell Verizon South Africa last year. By some chance the BEE partner of Verizon South Africa is also J&J. One would think there is a slight conflict of interest involved there,” said Venter.
J&J has significant interests in the financial and ICT sectors via Macquarie First South and Verizon Business South Africa.
Venter continued: “One would think that it would be a little difficult for Altech to participate in an auction where the BEE partner within the merchant bank and the target company are the same. Was that action a fair process? I have my doubts. But that’s under legal review.
“Maybe the reason it went to auction was potentially to satisfy competition authorities. If it was a closed scenario, the competition authorities might ask why they chose to do the deal with MTN.
“It is also unfortunate that one of the panel members that adjudicate on the tribunal panel is an ex-MTN executive.”
Angela Gahagan, Verizon country manager, said that she knew very little about the internal workings of the merger.
“Obviously, I’d say we didn’t have an unfair advantage. The deal was handled by Verizon in the US, and we had very little to do with it locally,” Gahagan said.
MTN spokesman Bridget Bhengu also denied any wrongdoing on the part of the cellular operator.
Altech versus MTN/Verizon deal – give your view
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