Bloomberg News

Vodacom Must Pay $21 Million After Losing Congo Appeal

March 13, 2012

Vodacom Group Ltd. (VOD), the largest provider of mobile-phone services to South Africans, was ordered to pay former consultant Moto Mabanga $21 million after losing an appeal in a Democratic Republic of Congo court.

“The judgment is now final,” Mabanga said today by mobile phone from the capital, Kinshasa. Vodacom hasn’t received official confirmation of the judgment, spokesman Richard Boorman said from Johannesburg.

The appeal court in the city yesterday dismissed Vodacom’s stay of execution against a Jan. 25 judgment in which the Johannesburg-based mobile-phone operator was ordered to pay fees owed to Mabanga plus 8 percent a year in interest and the costs of the litigation, he said.

Mabanga sued Vodacom last year, seeking a $40.8 million “success fee” for work done during 2007 and 2008 on top of a $2.8 million service fee that he was paid for consultancy work. The mobile operator owns 51 percent of Vodacom Congo SPRL and is considering its options with the holding, which may include a sale, amid a dispute over funding with 49 percent shareholder Congolese Wireless Network.

A high court judge in Kinshasa in April 2011 provisionally ordered Vodacom to place shares amounting to the value of the claim in an escrow account pending a final order. In January the court awarded a reduced claim of $21 million to Mabanga. Vodacom appealed the judgment.

Mabanga said the appeal court handed the judgment orally yesterday. “I have a judgment and will now follow the legal process to recover the funds from Vodacom,” said Mabanga, adding that a written judgment will be made available today.

“We are now trying to identify Vodacom’s assets to attach them, if it comes to that,” said Mabanga.

To contact the reporter on this story: Sikonathi Mantshantsha in Johannesburg at smantshantsh@bloomberg.net

To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net


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