(Adds details on shareholder dispute starting in seventh paragraph.)
Oct. 21 (Bloomberg) -- Vodacom Group Ltd.’s efforts to sell its controlling stake in a Democratic Republic of Congo mobile- phone operator face separate challenges from its partner in the venture and a former consultant.
Lawyers for Congolese Wireless Network SPRL, which owns 49 percent of Vodacom Congo SPRL, filed an application in a Kinshasa court to stop the sale, Alieu Conteh, the chairman and founder of CWN, said. Moto Mabanga, a former consultant to Vodacom Group and director of Namemco Energy (Pty) Ltd., said he will halt any deal until he is paid a fee by Vodacom.
“We’ll send a letter to all the main shareholders and we’ll block the sale,” Conteh said in an interview in the capital, Kinshasa on Oct. 19. Vodacom has received court papers from CWN, Richard Boorman, a spokesman for Johannesburg-based Vodacom, said today. He declined to comment on Mabanga’s settlement claim as it is part of an ongoing court case.
MTN Group Ltd., Africa’s largest mobile-phone company, is seeking to buy Vodacom’s stake in the Congo venture, two people familiar with the matter said on Oct. 17. Angola’s Unitel SA is also among bidders, one of the people said. Unitel Deputy Chief Executive Officer Amilcar Safeca declined to comment by phone from Luanda, Angola on Oct. 18. Vodacom’s stock fell for a third day, declining 0.3 percent to 87.26 rand as of 1:53 p.m. in Johannesburg.
Vodacom, the largest provider of wireless services to South Africans, on Dec. 22 agreed with CWN to appoint London-based NM Rothschild & Sons Ltd. to “explore options” for its Congo unit, Boorman said. The process is still under way, he said. At least four companies are bidding for the stake, Johannesburg- based Business Day reported today, without saying where it got the information.
Mabanga is seeking a $40.8 million “success fee” for work he carried out for Vodacom during 2007 and 2008. A high court judge in Kinshasa in April ordered Vodacom to place shares amounting to the value of the claim in an escrow account pending a final order, he said. Vodacom has appealed the judgment, Boorman said.
CWN asked the Commercial Court in Kinshasa to block the sale until a dispute between CWN’s shareholders has been “exhausted” at the Court of Appeals in the city, according to court filings provided by CWN’s Conteh. The Commercial Court will consider the merits of the case next week, Conteh said. CWN informed Vodacom it would use its right of first refusal if it didn’t agree to terms of the sale, he said.
Conteh faces a challenge to his leadership of CWN in the Congolese courts from Feruzi Kalume Nyembwe, a director of Keratsu Holding Ltd., which owns 19.6 percent of CWN, according to court papers provided by Kalume Nyembwe.
“We want CWN to be managed by a specialist in telecommunications,” Kalume Nyembwe said in an interview in Kinshasa yesterday.
Conteh will be replaced as CWN’s manager by a provisional administrator for three months, a period which can be extended, according to a copy of an unsigned Court of Appeals ruling handed to Bloomberg by Kalume Nyembwe. The draft decision was read out by the court, Conteh and Kalume Nyembwe said.
The courts had “no right” to appoint a provisional administrator, Conteh said on Oct. 19, saying the draft judgment is “illegal.” The decision must still be certified by the court, Kalume Nyembwe said.
If Conteh is pushed aside, CWN could proceed with a shareholders’ meeting to discuss the sale of Vodacom Congo, should the interim administrator agree, Kalume Nyembwe said. “We’re not opposed to a sale,” he said. “But we’re not going to sell just to sell. You sell to make a profit.”
‘Sell for a Profit’
Vodacom Congo had 4.2 million subscribers at the end of March, according to Vodacom. It is the third-largest operator in the country, which has 65 million people and a mobile penetration rate of 17 percent, according to the U.S. Central Intelligence Agency’s World Factbook.
Vodacom Congo “needs capital to expand and deliver on the potential of the country,” Vodacom said in an e-mailed response to questions. “Continued delays, groundless accusations, and court action are utterly counterproductive and serve only to damage the future prospects of the business.”
--With assistance from Henrique Almeida in Lisbon. Editors: Vernon Wessels, Christopher Scinta, Tony Aarons.
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