South Africa’s Vodacom Group has vowed to defend any legal action in the Democratic Republic of Congo and seek an amicable resolution amid a conflict with its minority shareholder in Vodacom Congo.
Speaking on behalf of Vodacom Group, Bob Collymore, Chief Officer Corporate Affairs said: “We have been entirely open in our dealings with CWN and have acted in good faith to ensure the viability and growth of Vodacom Congo. We are single-handedly supplying funding to Vodacom Congo at commercial terms that were agreed by CWN’s (Congolese Wireless Networks’) directors.
“Having explicitly approved the terms of the funding, CWN cannot now claim ignorance of these terms and we refute any suggestion that Vodacom has unduly benefitted from the finance agreements. Any intended litigation on this issue is entirely without merit and a contrived attempt to force Vodacom to disproportionately fund further investment,” said Collymore
He added that Vodacom remains firmly focused on developing the Vodacom Congo business to its full potential, but we cannot justify further investment while relations with our minority shareholder are combative and dysfunctional.
Collymore said Vodacom finds the actions of CWN counterproductive and not in the best interests of either Vodacom Congo or the country as a whole,” he added.
Vodacom said although Vodacom has continued to constructively engage with 49 percent shareholder Congolese Wireless Networks (“CWN”), these discussions have thus far proven unsuccessful.
This is despite CWN having explicitly approved the terms of funding agreements that are now being disputed.
Vodacom Congo, which commenced operations in 2002, is 51 percent owned by Vodacom.
Vodacom said, “The funding agreements for Vodacom Congo, which clearly state the terms of the funding, were unanimously approved by the company’s directors including those appointed by CWN.
CWN has always been free to seek alternative funding. Despite this fact, CWN’s primary dispute with Vodacom relates to these funding agreements and CWN has threatened to take this matter to court in the DRC to force Vodacom to invest significant further sums in the business“.
For the year ended March 2009, Vodacom Congo accounted for 5.3 percent of Vodacom Group’s revenue.
by Goodman Majola