A logo sits on display outside the headquarters of Vodacom Group Ltd. in Johannesburg, South Africa. Photographer: Dean Hutton/Bloomberg
A logo sits on display outside the headquarters of Vodacom Group Ltd. in Johannesburg, South Africa. Photographer: Dean Hutton/Bloomberg

Vodacom Lesotho embroiled in spat with regulator

By Dineo Faku Time of article published Oct 12, 2020

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JOHANNESBURG - Vodacom’s subsidiary in Lesotho is embroiled in a spat with the country’s regulator revoking its operating licence.

The group said it approached the high court to overturn a decision by Lesotho Communications Authority (LCA) to withdraw its operating licence and impose a hefty R134 million fine for allegedly flouting corporate governance rules.

Vodacom Lesotho’s managing director, Philip Amoateng, said: “We had no option but to seek relief in the courts because the LCA’s decisions imposing an excessive fine as well as revocation of Vodacom’s operating licence are erroneous as a matter of law and public policy.”

The LCA revoked Voadom’s licence on Thursday and imposed the staggering fine, suspending 70 percent of the penalty for five years on condition that the group complied with the law.

Amoateng said Vodacom had notified the LCA of its intention to challenge the lawfulness of this decision and was shocked to receive the notice revoking its licence, in flagrant disregard of the rule of law.

“The LCA violated its prescripts and rules and our efforts to find an amicable solution have drawn a blank. Given the hostility shown by the LCA towards Vodacom, our options are limited to seeking redress in the courts to avert further damage to our brand, reputation and the interests of stakeholders, including customers, shareholders and employees,” said Amoateng.

Vodacom Lesotho had 14 days to apply to have the LCA decision imposing the fine reviewed by the court. Reports claim that LCA chief executive Mamarame Matela on Monday demanded that the company pay R40.2m immediately for flouting the rules.

Matela charged Vodacom Lesotho for failing to appoint an independent auditor from 2015 to 2019, and lack of remorse. It is alleged Vodacom Lesotho’s chairperson was related to a partner in the company’s external audit firm, meaning that the firm was not independent enough and that its assessment of the company’s financials was likely compromised.

The LCA also said Vodacom Lesotho failed to comply with the directive on out of bundle charging. Amoateng said Vodacom Lesotho was launched in 1996 and had made significant contributions to the fiscus and helped bridge the digital divide.

Vodacom Lesotho has 1.2 million subscribers and around 661 000 M-Pesa users who rely on the network for inclusive access to financial services.

“As a responsible corporate citizen, Vodacom Lesotho remains committed to complying with regulations and rule of law and further contributing to the country’s economic recovery in the wake of the global Covid-19 pandemic. Crucially, it remains business as usual for our customers,” said Amoateng.

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