Showdown looms in Lesotho as Vodacom fights back against ‘hostile’ authority
- The Lesotho communication authority has revoked Vodacom Lesotho's licence for not paying a fine of more than R40 million.
- It accuses Vodacom of appointing an auditor that has a family connection to its chairperson.
- Vodacom Lesotho has lodged an urgent court application.
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In a shock move, the Lesotho Communication Authority revoked Vodacom Lesotho's licence on Thursday after it failed to pay a fine of more than R40 million.
In a strongly worded statement in Sesotho, the LCA last week accused Vodacom Lesotho of breaking governance rules by appointing an auditing firm associated with the sister-in-law of its chairperson, Matjato Moteane, to audit its accounts – which, the LCA pointed out, included the Lesotho community’s money, which flows through Vodacom’s payment system M-Pesa.
The LCA said that Vodacom showed “stubbornness” and “pride” after being confronted about this supposed breach, and accused it of trying to hold the nation at ransom because of its control of telecommunication in Lesotho.
It fined Vodacom R134 million, with 70% of the fine suspended as long as Vodacom comply with the licensing rules in future.
But on Thursday, the LCA revoked Vodacom Lesotho’s licence when it emerged that the company was not willing to pay the effective R40.2 million fine.
Vodacom Lesotho says it was “shocked”, claiming that it was a flagrant disregard of the rule of law. The company believed it had two weeks to appeal the fine in the court.
It has now lodged an urgent application in the High Court of Lesotho against the fine and the decision to revoke its licence.
“We had 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 license are both erroneous as a matter of law and public policy,” Vodacom Lesotho managing director Philip Amoateng said.
“Given the hostility shown by 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,” added Amoateng.
“These actions put at risk the country’s telecommunications ecosystem, including financial services platforms such as M-Pesa, and tens of thousands of jobs. Through significant investments by Vodacom Lesotho, the country has been at the cutting edge of new technologies having been the first on the continent to launch 5G.”
The company assured its clients that for the time being “it is business as usual”.
Vodacom Lesotho was launched in 1996, and has 1.2 million clients.
Vodacom has been clashing with the LCA for some time, reports The Post in Lesotho. The main source of contention is apparently how much the mobile company owed the LCA in annual fees, which are calculated as a percentage of the company’s net operating income.
According to the publication, Vodacom does not consider its income from its mobile payment platform Mpesa as part of its income for purposes of calculation, while the LCA objects to this approach.
Vodacom has around 661 000 M-Pesa users in Lesotho.
Business Insider has asked Vodacom to confirm the accusations regarding its auditor in Lesotho, as well as the reports about fee disputes. The article will be updated with its response, when received.
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