Cell C The high court case by unsuccessful bidders for the third cellular licence could be aided by a series of apparent blunders by the president’s office Ivor Powell Senior government figures this week scrambled to avoid further embarrassment over the Cell C debacle as they prepared for a court application by a rival bidder to interdict the announcement of South Africa’s third cellular telephone operator. Affidavits submitted in the court case by the senior officials suggest their intervention is likely to obscure rather than clarify allegations of political interference in the deliberations leading to the awarding of the licence.
Unsuccessful bidder NextCom’s application was lodged in the Pretoria High Court, in accordance with an earlier court ruling, after the South African Telecommunications Regulatory Authority (Satra) reconfirmed its earlier recommendation of the Cell C consortium. The initial recommendation was arrived at in controversial adjudications in February. NextCom charges that the adjudication process was fatally flawed and is seeking an interdict delaying the final announcement of the successful bidder for the third cellular licence. This is the first phase in a legal strategy aimed at securing a judicial review. NextCom’s case – which is supported by another unsuccessful bidder, the Scandinavian-backed Telia Telenor consortium – could be aided by a series of seeming blunders on the part of the president’s office. The effect of alleged interventions by presidential legal adviser Mojanku Gumbi was to sideline Satra chair Nape Maepa from the adjudication of the third cellular licence. In her affidavit Gumbi denies having “placed any undue pressure” on Maepa – contradicting Maepa’s own sworn testimony that both Gumbi and Minister of Posts, Telecommunications and Broadcasting Ivy Matsepe-Casaburri intervened ahead of initial adjudications in February to force his recusal from the third cellular adjudication process. According to sources inside the process, the forced recusal of Maepa had the effect of swinging the balance of the divided Satra council vote to favour the Cell C bid. This apparent skewing of the vote, with its seemingly inexplicable decision to ignore a series of independent expert reports critical of the Cell C bid, is what NextCom will argue fatally compromised the integrity of the Satra decision. As chair, Maepa could have exercised a casting vote in a council split down the middle.
But despite Gumbi’s denial, the Mail & Guardian has evidence that Gumbi did indeed place pressure on Maepa to force his exclusion from the final round of Satra deliberations – when the body sat late last month to reconsider its original recommendation. Earlier charges – levelled to force the recusal of Maepa from the February adjudications – confusedly placed Maepa in a business partnership with bidder Africa Speaks’s Moshudu Ramano. In fact Maepa’s connection – in a long-defunct venture – was with a businessman sharing the same first name, Moshudu Chivase.
Maepa attempted to have the recusal overturned following the clearing of his name by Matsepe- Casaburri, who admitted that investigations by her department had revealed no conflict of interest on the part of Maepa as had earlier been alleged. But writing on behalf of President Thabo Mbeki, in a letter dated June 28, Gumbi reasserts the conflict of interest claim: “On 27 June 2000,” she writes, “we conducted a company search in respect of Sun Telecommunications Pty Ltd. Mr Moshudu Elphas Chivase and yourself are still registered as directors of this company.” Gumbi goes on to assert that (with Chivase obliquely associated with one of the bids) the directorship constitutes a conflict of interests as envisaged in Section 15.1 (b) of the Telecommunications Act and concludes: “You therefore cannot participate in the process.”
The M&G has access to official company registration documents that conclusively prove the falsity of Gumbi’s claim. A CM29 form dating from February this year establishes beyond doubt the resignation of Maepa from Sun Telecoms. According to Maepa himself the form merely formalises the dissolution of a partnership (in a company which never traded) which had ceased to be operative as early as 1993. The source of the confusion could lie in the fact that certain Internet company search engines are notoriously unreliable, especially in their failure to register resignations and changes in company structure.
In her affidavit, Matsepe-Casaburri states in defence of her competence to decide on the matter of the award that, while the “ultimate determination” of the award rests exclusively with herself, “Cabinet has appointed a special Cabinet committee to assist me in evaluating the recommendation”. This is despite her denial in a letter to the M&G this week that the Cabinet had ever addressed the matter of the cellular licence at all. Matsepe-Casaburri’s assertion here seeks to establish that, as specified in the Telecommunications Act, not only her own role in the process, but also the independence of the adjudication process by Satra would be guaranteed. The M&G reported that Cabinet members had questioned the advisability of awarding the licence to the Cell C consortium in the light of the ongoing controversy.
In terms of an earlier court ruling, Matsepe-Casaburri is tasked with announcing a final decision after allowing a week following Satra’s final recommendation for rival bidders to respond and register objections. But the court could force a much longer delay as the whole process goes under review. Cell C is also opposing the NextCom interdict in papers to be brought before the court today. Together with Matsepe-Casaburri, the consortium argues that investor confidence is being adversely affected by NextCom’s second-guessing of the process.