The Independent Communications Authority of South Africa has made a midnight confession that it blundered spectacularly in trying to block the R88.4-billion Vodacom listing \u2014 and the mistake could cost taxpayers up to R5-million.<\/p>\n
The broadcasting and telecommunications regulator made the frank admission during a presentation to parliament\u2019s portfolio committee on communications on Thursday night, in a meeting that finished minutes before midnight.<\/p>\n
The meeting was scheduled to reveal Icasa\u2019s strategic plan and budget for the next financial year but ended up being an inquiry into the disputed listing \u2014 revealing all the drama and intrigue behind efforts to stop it at the 11th hour.<\/p>\n
It also emerged that greater parliamentary oversight will now be exercised over the oft-criticised regulator.<\/p>\n
The listing followed Telkom\u2019s sale of 15% of Vodacom to UK telecommunications giant Vodafone for R22.5-billion.<\/p>\n
Icasa shocked the market when it went back on an earlier decision to approve the deal late on Friday, May 15.<\/p>\n
The rand weakened by 3% immediately after the announcement. The listing, scheduled for the Monday, was the biggest stock exchange listing thus far this year.<\/p>\n
During the initial, open hearing, Icasa chairman Paris Mashile said he and his 25- strong team present \u201cgot it wrong\u201d.<\/p>\n
He said they were \u201cfilled with contrition, remorse and regret\u201d over joining Cosatu\u2019s application to stop the listing.<\/p>\n
He said the decision was \u201cproblematic\u201d and \u201cnot properly handled\u201d, adding: \u201cWe fell off our horses. Next time around we would not have done it the same way.\u201d<\/p>\n
Mashile said he had been \u201capproached by other people\u201d about going to court.<\/p>\n
Later, a closed session was convened to discuss the events of that weekend, when a high court judgment was made against Icasa and Cosatu on the Sunday night, with the former being ordered to foot the bill for the urgent interdict.<\/p>\n
In a series of startling admissions by Icasa, it emerged that:<\/p>\n
# CEO Karabo Motlana was \u201csitting in his office\u201d and was not informed of the decision taken by six of Icasa\u2019s eight councillors to go to court to halt the listing;<\/p>\n
# Mashile was out of the country at the time, but had been approached by Cosatu general-secretary Zwelinzima Vavi and Jacob Zuma\u2019s lawyer Julie Mohamed, who was the instructing attorney for the union, for information and to join the application; and<\/p>\n
# Three legal opinions \u2014 including those of Cosatu\u2019s lawyers \u2014 were obtained by councillors before they took the legal route and contradicted an earlier decision to endorse the deal.<\/p>\n
Motlana said he was \u201cin the building\u201d when the decision was taken by the councillors. He was only informed of the move by his head of legal affairs.<\/p>\n
\u201cIn the ordinary course that council instructs external legal advice it must come to the office of the CEO … as the accounting officer,\u201d he said.<\/p>\n
Mashile said the exercise could cost Icasa up to R5-million in legal fees. Icasa\u2019s own costs were in the region of R250000.<\/p>\n
Members of the portfolio committee labelled the failed court bid \u201cfruitless expenditure\u201d and insisted that \u201csomeone must be held accountable for the debacle\u201d.<\/p>\n
Committee chairperson Ismail Vadi said he would approach the Treasury for clarity on \u201cexactly who should pay legal costs\u201d.<\/p>\n
He questioned Icasa\u2019s independence, saying it had joined a \u201ccivil society grouping\u201d like Cosatu despite the then president Kgalema Motlanthe having signed off on the deal.<\/p>\n
\u201cSince when does an independent regulator join action with a civil society grouping against the very government you are serving?\u201d he asked.<\/p>\n
His fellow committee members also blasted Icasa, with ANC MP Eric Kholwane insisting that \u201cthey must provide answers\u201d.<\/p>\n
Icasa councillor Robert Nkuna, one of the six who made the decision, said: \u201cWe have reflected on the matter. It was wrong. A decision was made and it will never happen again.\u201d<\/p>\n
On the cost, Nkuna said \u201cinvoices will be coming through… and we don\u2019t know how much it will come through\u201d.<\/p>\n
In March, the deal was approved by Telkom shareholders, who include government, before being approved by the Competition Commission. Icasa also gave the nod, saying it did not need to make a ruling.<\/p>\n
But a week before the listing Cosatu filed an application for Icasa to rescind its decision and hold public hearings. Nothing was heard from Icasa until that Friday when it announced that it planned to hold public hearings in mid-June.<\/p>\n
Icasa councilor Marcia Socikwa, who filed a supporting affidavit in the application, said public hearings \u201cwould be rendered futile and superfluous\u201d if the listing went ahead.<\/p>\n
Vadi also lambasted the regulator on other issues, questioning overseas trips by its executive, work attendance and irregular appearances before parliament. It was subsequently decided that the board must present quarterly reports to the committee.<\/p>\n
Said Vadi: \u201cWe\u2019d like to know how we are going to manage this relationship over the next five years.\u201d<\/p>\n
The Icasa board promised to give Vadi a \u201cschedule of all (overseas) trips undertaken and proposed trips for the present year\u201d.<\/p>\n
Mashile admitted, when questioned by members over the oversight role that Icasa plays, that the organisation is sometimes out of its league in an ICT sector awash with many billions of rands.<\/p>\n
\u201cWithout a doubt the operators are like Goliath… when we take them on it\u2019s akin to that of a heavyweight boxer fighting with a flyweight boxer.\u201d<\/p>\n