Vodacom May Lose Control of Congo Unit Amid Dispute

Vodacom Group Ltd. (VOD) may lose control of its wireless unit in the Democratic Republic of Congo after a court ordered its shares be confiscated to settle a $21 million dispute with a consultant.

The commercial court, based in the capital Kinshasa, on March 26 issued an order to attach 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 consultancy fee, according to court documents provided by Mabanga.

“Vodacom’s appeal against the judgment is still before the court and is due to be heard,” Pieter Uys, the chief executive officer of Johannesburg-based Vodacom, a unit of Vodafone Group Plc, said by phone today. The company has also pleaded to the central African nation’s justice inspectorate to speed up the appeal. “We are aware of the confiscation order. Our lawyers are looking into it and will respond.”

Mabanga sued Vodacom last year, seeking a $40.8 million success fee for work done during 2007 and 2008. The commercial court ruled on a reduced award. Mabanga was already paid a $2.8 million service fee for the consultancy work. “We have paid him in terms of the two contracts we had with him and there are no outstanding payments,” said Uys.

Jose Roger Mbonga, the head clerk at the commercial court, yesterday confirmed the authenticity of the order, which was signed and executed by Pasho Babene, a bailiff in the Kinshasa suburb of Gombe.

Vodacom, the largest provider of wireless services to South Africans, always honors its contractual obligations, Uys said. The contracts Vodacom had with Mabanga stated that all agreements were to be in writing and any disputes would be resolved in the South African legal jurisdiction, said Uys.

“The court is handling the attachment process and will determine how many shares must be sold in order to pay me,” Mabanga said by phone today. “That’s because nobody knows their value as the company is unlisted. It’s been a long struggle.”

To contact the reporter on this story: Sikonathi Mantshantsha in Johannesburg at smantshantsh@bloomberg.net

To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net

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