Chinese networking equipment manufacturer ZTE is taking ZTE Mzanzi, an SA company in which it has a minority equity stake, to the high court in Pretoria in an effort to have an interdict the latter company won against Telkom overturned.
ZTE Mzanzi, led by Tumi Magasa, won the interim court interdict at the end of March, preventing Telkom from continuing with a R13bn network upgrade with chosen suppliers Huawei and Alcatel-Lucent Technologies. Magasa accused Telkom of failing to follow internal tender procedures and said his company had been disqualified unfairly.
ZTE SA CEO Cris Fuentes says the company is “disappointed” that ZTE Mzanzi took Telkom to court. He says ZTE plans to review its relationship with Mzanzi, but stresses the two firms may still continue working together once the review is completed.
Telkom is spending R13bn over five years upgrading its access network into homes and businesses to allow it to offer much faster broadband connections and other services. Group CEO Nombulelo Moholi said earlier this month that she was confident Telkom’s procurement policies would withstand scrutiny. She expressed concern at what she called a “recent trend of challenging the awarding of key tenders in the courts” and said the practice would have “serious consequences for customers by stalling roll-out plans unnecessarily”.
Now ZTE has hit back at ZTE Mzanzi, which is a distributor and brand licensee of the Chinese company, saying it does not support the approach to the courts. “These legal proceedings were instituted without [ZTE’s] approval and without the approval of its representative on the board of ZTE Mzanzi.”
According to ZTE, it has instructed Bowman Gilfillan attorneys to apply to the high court to set aside the interdict granted to ZTE Mzanzi.
But ZTE Mzanzi’s Magasa tells TechCentral that he doesn’t understand why ZTE is intervening. “This is a matter between ZTE Mzanzi and Telkom,” he says. — (c) 2012 NewsCentral Media