SA opposition party COPE accuses ANC of meddling in Vodacom deal

Newly formed South African political party, the Congress of the People (COPE,) has accused the ruling African National Congress of attempting to influence the controversial sale of fixed line operator Telkom’s stake in mobile giant Vodacom to Vodafone UK, for political and personal reasons.

This follows a last minute about-turn by the Independent Communications Authority of South Africa (ICASA) who opposed the deal in the eleventh hour, after earlier giving the transaction the green light.

COPE spokesperson Phillip Dexter, who questioned the independence of ICASA, argued that the ruling party had influenced the decision.

Says Dexter: “The latest decision by ICASA to make a u-turn on their previous decision with regard to the transaction immediately after the new administration had come into office and certainly not co-incidentally after Cosatu had filed court papers asking for the ICASA’s April 2009 decision to be set aside, raises serious questions about the regulators independence and could dash all hope and investor confidence that government has briefly enjoyed,”

“The Congress of the People (COPE) is dismayed at what is nothing but unbridled interference and a deliberate attempt to influence the Vodacom-Vodafone transaction for political and personal reasons. It is common knowledge that there were, thankfully, failed attempts made by the ruling party to influence the BEE component of the Vodacom-Vodafone transaction before shareholders finalised it. We call on the ANC and its alliance partners to demonstrate to national, local and foreign investors their respect for the independence of regulatory bodies such as ICASA, not only in words but in deed. COPE is concerned about the negative consequence of such developments on the standing reputation of the country as an investment destination, especially when the economy is undergoing severe strains and we together with the rest of the world compete for reduced potential inflows of capital.”

Vodacom yesterday proceeded with its listing on the Johannesburg Stock Exchange (JSE), despite the urgent court application brought by trade unions and regulators to prevent the move over the weekend.

Dexter welcomed the ruling of the North Gauteng High Court, which found in favour of the Vodacom, Vodofone transaction. Dexter added: “COPE however wishes to condemn and express its disgust at statements made by Cosatu in defiance of the ruling by the High Court. The suggested protest action by Cosatu against Vodacom as result of the listing on the JSE and sale by Telkom of 15% stake in Vodacom to Vodafone is childish and does not in any manner advance the interests of workers.”

The completed listing process will see the country’s largest fixes line operator, Telkom, sell 15 percent of its 50 percent stake in Vodacom to UK based mobile network giant Vodafone for ZAR22,5 billion, with the balance of the stock going to Telkom shareholders.