Cape Town - Mobile operator Vodacom [JSE:VOD] is being sued for $14bn (R197bn) in the Democratic Republic of the Congo (DRC) by a controlling shareholder of a minority partner in that country.
The legal matter relates to a claim brought forward by Alieu Conteh in the Commercial Court of Kinshasa against respondents, including Vodacom International and Vodacom Congo.
Conteh is the controlling shareholder of Congolese Wireless Networks (CWN), a company that holds a minority 49% stake in Vodacom Congo. Vodacom International holds 51%.
Vodacom, in its interim results statement released last week, disclosed that Conteh has launched a legal challenge against a previous court decision in that country to remove him as a "statutory manager of CWN".
“The action also includes an unsubstantiated claim for $14bn against VIL (Vodacom International) for its alleged role in helping to undermine Conteh’s position as former statutory manager,” read the statement.
However, Vodacom has dismissed Conteh’s claim as being “without merit” and the company said it is opposing the court bid. There have also been no further developments since last week, said Vodacom spokesperson Tshepo Ramodibe.
Ramodibe also told Fin24 that Vodacom has been “roped” in to the matter. Vodacom has 11.9 million subscribers in the DRC.
"It's primarily a shareholder issue with the CWN but because we are a partner in the Vodacom DRC business, this is how Vodacom has been roped in to the conversation,” Ramodibe told Fin24.
"The $14bn that's been stated, we view that as unfounded and without merit. This is a court process that will be handled. But for us it's something that we've declared and put publicly and in all documentation in the JSE, to inform our shareholders of this ongoing legal matter that we're addressing in the DRC,” he said.
This is not the first time that Vodacom has run into controversy in the DRC. In 2012, a political fixer, Moto Mabanga, sued Vodacom for R396m relating to work he claimed to have done for the company. Vodacom was then reportedly ordered by a court in that country to pay Mabanga R159m.
And in 2010, CWN also accused Vodacom of allegedly taking out $200m out of the DRC using fraudulent means.The latest court action against Vodacom also comes after MTN Nigeria [JSE:MTN] disclosed last month that it is being sued R74.8bn for failing to disconnect unregistered SIM cards in a timely manner.