Vodacom is in talks with Neotel and its shareholders about a “revised transaction structure”, the mobile group said in a statement to shareholders on Monday. But it has not explained what prompted it to re-look at the R7bn deal.
The decision has forced the Competition Tribunal to postpone hearings into the proposed acquisition.
A Vodacom spokesman declined to comment on the reasons for the renewed discussions with Neotel. Prior to the pre-hearing, the details are confidential, the spokesman said.
Vodacom said the outcome of the new discussions with Neotel “will directly impact the extent of the approval being sought from the Competition Tribunal and the scope of the Competition Tribunal hearing”.
This prompted the two parties to request that the hearings be postponed.
“The details applicable to the postponement are to be determined at Competition Tribunal hearing in Pretoria today. Shareholders will be advised accordingly of the outcome,” Vodacom said.
The developments come a month after Neotel director in charge Kennedy Memani said that the company was close to wrapping up an investigation into possible bribery that led to the suspension in July of its CEO Sunil Joshi, and its chief financial officer, Steven Whiley. It is not clear if the two events are related.
“We are at the tail end of the disciplinary process,” Memani said on 14 October. “We are hoping to make an announcement in the next two to three weeks. We are interacting with both the CFO and CEO. After that is done, we will definitely make an announcement.”
Joshi and Whiley were placed on “special leave” at the end of July following publication of a report in the Mail & Guardian that said Neotel may have made dodgy payments to a company called Homix in order to secure a telecoms contract worth R1,8bn from state-owned Transnet.
Quoting correspondence from Neotel’s auditors, Deloitte, which the M&G said it has seen, Neotel paid a 2% “success fee” to Homix of R36m to secure the Transnet deal. In addition, Homix was promised a further R25m to secure the related sale of Neotel assets to Transnet, though this money hasn’t been paid, the newspaper said.
The report raised questions about the role of Transnet finance chief Anoj Singh as well as Neotel’s Joshi in ensuring the payments to Homix. Joshi allegedly ordered his staff to pay the R36m to Homix after meeting with Singh and securing payment from Transnet to Neotel. The M&G said Transnet denied that Singh was party to any discussions about a payment to Homix.
Neotel said at the time it suspended Joshi and Whiley that during an audit, “certain alleged irregularities were raised by Neotel’s external auditors”.
“On learning of the irregularities, the Neotel board took immediate action, mandating an independent investigation.
“The investigation concluded that the irregularities indicated a possible noncompliance with the company’s internal procurement and payment processes. Neotel is committed to the highest standards of corporate governance, and will not tolerate any deviation from these standards,” it said.
“As such, the board has further appointed a subcommittee to continue an investigation into the noncompliance, and, importantly, to ensure the strengthening of the company’s policies, procedures, internal controls and governance. The CEO and CFO have taken special leave in co-operation with this investigation.” — © 2015 NewsCentral Media
