Lesotho has written to Vodacom Group’s subsidiary in the landlocked Southern African nation, telling it that its “unified licence” to operate has been revoked. Vodacom said it will fight the decision in court.
The decision by the Lesotho Communications Authority (LCA) comes after the regulator imposed what Vodacom called “a staggering” fine — the equivalent of R134 million — on the company for allegedly flouting its licence conditions and for allegedly being in breach of local legislation governing companies. Vodacom is Lesotho’s biggest mobile operator.
In response to a query from TechCentral on Thursday, Vodacom Group said in an e-mailed statement it intends to lodge an urgent high court interdict against the LCA. It assured its customers in the country, which is entirely bordered by South Africa, that it is “business as usual”.
“In the same application, Vodacom will be challenging the lawfulness of the LCA’s decision, set out in a notice dated October 8, 2020, revoking its unified licence,” it said.
Vodacom Lesotho MD Philip Amoateng said in the statement: “We have no option but to seek relief in the courts because the LCA’s decisions imposing an excessive fine as well as the revocation of Vodacom’s operating licence are both erroneous as a matter of law and public policy.
“These actions put at risk the country’s telecommunications ecosystem, including financial services platforms such as M-Pesa, and tens of thousands of jobs,” Amoateng said.
Vodacom said it has 14 days to apply to have the LCA’s fine reviewed by the high court. This is according to the regulator’s own administrative rules, it said.
“Vodacom notified the LCA of its intention to challenge the lawfulness of this decision and was shocked to receive the notice of revocation of the unified licence … in flagrant disregard of the rule of law,” the company said.
“The LCA has unfortunately violated its prescripts and rules and our efforts to find an amicable solution to the dispute has drawn a complete blank. Given the hostility of the LCA towards Vodacom, our options are now limited to seeking redress in the courts to avert further damage to our brand, reputation and the interests of stakeholders, including our customers, shareholders and employees,” said Amoateng.
According to a report in The Post, a publication based in the capital, Maseru, the fine “appears to” have the blessing of the country’s cabinet and its communications minister.
At the heart of the dispute is an allegation by the LCA that Vodacom Lesotho flouted corporate governance rules by hiring an auditing firm allegedly owned by the sister-in-law of the operator’s chairman, Matjato Moteane. Moteane leads a consortium called Sekhametsi that owns 20% of Vodacom Lesotho (Vodacom Group owns the other 80%).
According to the article in The Post, LCA chief executive Mamarame Matela instructed Vodacom Lesotho, in a letter dated 28 September 2020, to pay the equivalent of R40.2 million of the fine in local currency, with the remaining amount suspended for five years, provided the company “does not commit any further contraventions of its regulatory obligations during the said period”.
Lesotho is by far Vodacom Group’s smallest operation, with 1.2 million subscribers. However, the group said that since Vodacom Lesotho launched in 1996, the company has made “significant contributions to the fiscus, helped bridge the digital divide and introduced programmes that have benefited many of the country’s citizens”.
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This article was first published on TechCentral here and is republished with permission.