WirelessG CEO Carel van der Merwe has hit back at mobile operator Vodacom’s claims in court papers that his company is “desperate”, saying it’s his “fiduciary obligation to be desperate”.
WirelessG, a Wi-Fi infrastructure specialist, is involved in a high-stakes court battle with minority shareholder Vodacom over claims that the operator is in breach of the parties’ shareholders’ agreement.
On Monday, TechCentral revealed that Vodacom South Africa business development managing executive Tlhabeli Ralebitso said in an answering affidavit filed at the high court in Pretoria last week that the legal action brought by WirelessG against Vodacom was a “desperate attempt” to save the Wi-Fi company’s business.
WirelessG took its partner to court, accusing the operator of reneging on the shareholders’ agreement that grants it exclusivity over any Wi-Fi infrastructure Vodacom wants to build. This, WirelessG has argued, extends to data “offloading”, in terms of which Vodacom may use Wi-Fi infrastructure to take pressure off its mobile network. Vodacom has denied the agreement includes any exclusivity of this nature.
In the court papers, Vodacom said it had provided a monthly revenue guarantee to WirelessG of R250 000 plus a monthly fee of R50 000. Loss of this revenue through the cancellation of agreements “has caused WirelessG to make this application [to the court]”, Ralebitso said in the affidavit.
“WirelessG must have come to the realisation that the business is not sustainable without monthly payments [from Vodacom] and on income generated only from its public hotspot business. It is for this reason that this application is made, in a desperate attempt to extend WirelessG’s participation into other areas of Vodacom’s business, areas in which it was never intended that WirelessG would participate.”
WirelessG has 10 days to file its comments on the answering affidavit and Van der Merwe says he can provide only “preliminary comment” ahead of that filing.
He says it is the fiduciary responsibility of both him and of Ralebiltso — who sits on the WirelessG board — to be “desperate” to ensure the “terms of the shareholders’ agreement are properly executed”.
“Vodacom’s misleading statements have to stand the test in court. One statement that will most definitely not stand the test in court is its misleading statements on certain investments,” Van der Merwe says. “Nor will it stand the test that it has delivered our benefits. If something is not visible on our balance sheet, it cannot be regarded as an investment.”
He says Vodacom’s answering affidavit is an attempt to “mislead the reader”, specifically with its focus on the retail agreement between the parties.
“Our dispute is about specific undelivered benefits that have been paid for by the other shareholders of WirelessG,” Van der Merwe says. “The uncomfortable fact Vodacom has to deal with is that it cannot provide Wi-Fi to its customers independently of WirelessG. With this in mind, if Vodacom foresees a profitable Wi-Fi business opportunity when doing this itself, it will most certainly provide the same opportunity to WirelessG. That is the logic behind our argument.”
The high court is expected to hear the matter in early April. — (c) 2013 NewsCentral Media
- See also: WirelessG ‘desperate’, says Vodacom