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Vodacom, LCA agree to settle out of court

Lesotho's widely read newspaper, published every Thursday and distributed throughout the country and in some parts of South Africa.

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…settlement will end long-drawn out legal battle over authority’s bid to revoke Vodacom’s licence

Mohalenyane Phakela

VODACOM Lesotho and the Lesotho Communications Authority (LCA) have resolved to negotiate an out court of settlement to their long-running legal battle wherein the authority sought to revoke the mobile communications giant’s operating licence.

Lawyers representing both sides this week told the Lesotho Times that they were working on a settlement which they would present to the High Court for endorsement next week.

The legal battle stems from the 7 October 2020 decision by the LCA to revoke Vodacom’s operating licence on the grounds that it had failed to comply with the authority’s directive to pay a M40, 2 million fine.

The LCA , then under the stewardship of former CEO, Mamarame Matela, had initially fined Vodacom M134 million for what it said were serious infractions since 2015 including “submitting audited financial statements that were unaccompanied by a certification issued by an independent external auditor”.

Vodacom was ordered to immediately pay M40, 2 million, representing 30 percent of the entire fine imposed on it. The remaining M93, 8 million (70 percent) was suspended for five years on condition that Vodacom does not commit further offences in contravention of its regulatory obligations within that period.

The fine ought to have been paid on 7 October 2020. When it was not paid, the LCA decided to revoke Vodacom’s operating licence the following day.

This prompted Vodacom to file an urgent High Court application for an interim order nullifying the revocation. The interim order was duly granted by the now deceased Justice Thamsanqa Nomngcongo paving the way for Vodacom to continue providing services pending the finalisation of its application for a final order against the LCA decision.

The chairman of the board of LCA, the LCA and the CEO of the LCA are the first to third respondents respectively in the application.

In terms of the final reliefs sought, Vodacom wants the court to nullify the LCA’s decision to revoke its licence and to fine it M134 million.

It also wants the court to declare as unlawful, the LCA’s decision to include M-Pesa revenues as part of telecommunications revenue when calculating the regulatory fees Vodacom is expected to pay for its mobile communications licence.

Justice Keketso Moahloli heard the matter to finality on 6 December 2020. He reserved judgement to an unspecified date, saying he first needed to consider all the submissions which had been made.

Since that time he had had not delivered his verdict. He had recently indicated  that judgement would be finally be delivered on Monday but this did not happen with both sides’ lawyers telling this publication that they were negotiating an out of court settlement.

Vodacom is represented by Advocate Motiea Teele while Adv Christopher Lephuthing is the LCA lawyer.

“We are currently preparing a settlement agreement which we intend to complete before Monday. We will then present it to the judge to make an order of court,” Adv Lephuthing said this week.

His sentiments were echoed by Adv Teele.

Although both lawyers would not be drawn into revealing any details, sources close to the developments have told the Lesotho Times that the LCA, now under acting CEO, Nizam Goolam, has agreed to withdraw the hefty fine imposed on Vodacom. The sources said Mr Goolam and the LCA board consider the fine imposed on Vodacom as excessive. It is said they also agree that shutting down Vodacom would paralyse the country as it commands the market share in the mobile communications industry with at least 1, 2 million customers.

Vodacom further states that it commands 88 percent of the market share in the mobile money space and transacts over M1 billion per month.

The sources said LCA had also agreed to withdraw regulations imposed by Ms Matela which require mobile communications companies and other licensees to submit names of prospective senior officials for vetting before they are appointed or before their contracts are renewed.

Ms Matela’s contract was not renewed when it expired on 31 March this year. The government had suspended her last year for alleged corruption in the awarding of a M500 million tender to to Global Voice Group (GVG) South Africa for the supply of a Compliance Monitoring and Revenue Assurance system.

The system would enable the LCA to actively spy on citizens’ private communications on their mobile phones. It would also enable the LCA to monitor citizens’ financial transactions conducted through their mobile phones.

The government has resolved to challenge the tender award. Ms Matela has vehemently denied corruption allegations in the award of the tender.

Instead, she has accused former Communications, Science and Technology Minister, Keketso Sello, of refusing to promulgate the regulations until he was given a M3 million bribe by GVG. She said the former minister also demanded to have his company subcontracted by GVG before he could approve the tender.

She also accused Mr Sello of demanding sexual favours from her as a condition for keeping her job. She even reported the sexual harassment claims to outgoing Prime Minister Moeketsi Majoro who has to date remained tight-lipped over the issue. She subsequently reported the matter to the police who said they completed their investigations last year and submitted the docket to the Director of Public Prosecutions (DPP), Hlalefang Motinyane.

After initially suspending her, the government then sent Ms Matela on forced leave pending the expiry of her contract on 31 March 2022. It was not renewed when it expired. Ms Matela has since joined politics as deputy leader of the Teboho Mojapela-led Socialist Revolutionaries (SR). She was sworn in as a non-constituency legislator under the proportional representation (PR) system.