Vodacom Group Ltd. (VOD) may lose its shares in a wireless unit in the Democratic Republic of Congo after a court ordered the confiscated stock be auctioned next month if a $21 million dispute with a consultant isn’t settled.
The commercial court, based in the capital Kinshasa, issued an order on May 14 to sell by public auction Vodacom’s 510,000 shares in its 51-percent held Vodacom Congo SPRL unit in order to enforce its Jan. 25 judgment that Vodacom pay Moto Mabanga’s Namemco Energy (Pty) Ltd. a $21 million consulting fee, according to court documents provided by Mabanga.
The court’s head clerk, Jose Roger Mbonga Kinkela, confirmed the veracity of the document and the announcement of a public auction when approached yesterday at the Gombe commune of Kinshasa. The shares were seized by the court from Vodacom on March 26.
“We believe that the contemplated seizure and sale of shares in Vodacom Congo is legally flawed and would taint any participating third parties,” Richard Boorman, a Vodacom spokesman, said in an e-mailed response to questions today. “We have accordingly instituted legal action against this process.” He didn’t immediately respond to further questions.
The commercial court said in the announcement that “in the case of failure of payment of the amount due to the plaintiff,” it will proceed with a sale of the seized shares at the headquarters of the court on June 3.
Mabanga sued Johannesburg-based Vodacom, a unit of Vodafone Group Plc (VOD), last year, seeking a $40.8 million success fee for work done during 2007 and 2008. The commercial court ruled on a reduced award in January. Mabanga was already paid a $2.8 million service fee for the consulting work, which Vodacom maintains was a full and final settlement of its obligations.
The 510,000 shares represent Vodacom’s entire holding in the Kinshasa-based unit that increased its customers 33 percent to 5.1 million in the quarter through December, Vodacom said on Feb. 8.
“Before the court announcement I have been receiving telephone calls from people who wanted to know if the shares were available,” Mabanga said in a mobile-phone interview from Kinshasa. “The sale is not a Mabanga process, it’s a court process. I just want to be paid my money.”
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