Vodacom has been been ordered to pay a politically connected fixer $21-million this week by a court in the Democratic Republic of Congo (DRC).
Vodacom has been been ordered to pay a politically connected fixer $21-million (R159-million) this week by a court in the Democratic Republic of Congo (DRC), but the episode could end up costing the mobile operator almost twice that amount.
On the phone from Kinshasa this week, Moto Mabanga, the South African based fixer who was awarded the money by the court, said he reserved the right to go after the $19.6-million (R149-million) he felt he was still owed.
The Mail & Guardian initially reported on the dispute between Mabanga’s company, Namemco Energy, and Vodacom in August 2010. At the time, Mabanga, who consulted in the DRC for Vodacom, was suing the mobile conglomerate for R396-million in the South Gauteng High Court in Johannesburg.
The amount related to consulting work Mabanga did for Vodacom in the DRC between May 6 and July 31 2007 and September 12 2007 and August 31 2008.
The disputed amount of $40.8-million relates to a ‘success fee” that Mabanga claimed was negotiated between himself and Vodacom.
According to the consultancy agreements between Vodacom and Namemco Energy, Mabanga was tasked with advising Vodacom on economic, sociopolitical and security conditions in the DRC, providing advice and assistance on ‘government relations issues” in the the country, advising and assisting in the relationship between Vodacom and its DRC partner, Congolese Wireless Network (CWN), ensuring that Vodacom’s DRC staff were safe and not harassed or obstructed from doing their jobs, identifying parties interested in buying CWN’s 49% shareholding in Vodacom Congo and securing visas for Vodacom staff to enter the DRC.
This week Mabanga said he had had to change his course of action, switching his legal challenge from South Africa to the DRC, after he heard about a year ago that Vodacom was seeking to sell off its business interest in the DRC.
‘If it had sold its 51% in Vodacom DRC, it would have been difficult for me to recoup the money I was owed,” said Mabanga.
‘So we went to court in the DRC to attach 5% of its shareholding in Vodacom DRC.”
In April last year, the high court in Kinshasa ruled that Vodacom had to provisionally place shares to the value of $40.8-million in an escrow account.
In January this year, the court in Kinshasa awarded a reduced claim of $21-million to Mabanga, against which Vodacom lodged an appeal for a stay of execution. The appeal was dismissed this week, paving the way for Vodacom to pay Mabanga the $21-million.
Asked to comment, Richard Boorman, Vodacom’s head of corporate affairs, said: ‘We have not yet received the full judgment on the ... matter. Once we have the relevant documentation, we will decide on an appropriate course of action.”
When the initial judgment was handed down in January, Vodacom released a statement that it would object to a ruling by a DRC court, a move that Mabanga insists shows the company’s lack of respect for the DRC’s judicial system.
The Vodacom statement issued by Boorman at the time said: ‘We would clearly have material objections to any judgment by a Democratic Republic of Congo court in which a monetary award was granted to Namemco while the contractual dispute is currently being heard in court in South Africa, which has jurisdiction on the issue.”
Vodacom’s objections stemmed from the fact that its contract with Namemco Energy stipulated that any dispute would be decided under South African law.