It’s very commendable for Cosatu to have gone to such great lengths to fight for workers’ rights in the Vodacom-Vodafone deal. Cosatu filed court papers opposing the transaction in which Vodafone would acquire a 15% stake in Vodacom from Telkom for a cash consideration of R22.5 billion.
The transaction increases Vodafone’s shareholding in Vodacom from 50% to 65%. The remaining 35% will be demerged by Telkom to its shareholders. Cosatu is of the opinion that there will be massive job losses as a result.
Effectively Cosatu is protesting against the ANC-led government’s decision to support the transaction, which will result in government effectively owning 10% in Vodacom for a period of 12 months after the JSE listing. Cosatu is of the opinion that only a handful of shareholders will benefit from the transaction. But isn’t it the nature of business transactions that shareholders will benefit and that there will be indirect spin-offs for the economy?
The question that arises from Cosatu’s action is whether it was based on legitimate concern for workers or whether it was inspired by political considerations. When Barclays acquired a 60% stake in Absa for R33 billion in 2005, Cosatu rightfully raised concerns about possible capital outflows in future as a result of surrendering control of a South African entity to foreigners. However, the absence of determined legal challenges and boycott threats if the transaction went ahead were conspicuous by their absence. Perhaps it is important to highlight that the Batho Bonke consortium, led by Tokyo Sexwale, held a 10% share in Absa and benefited handsomely from the Barclays/Absa transaction. At the time there were no concerns that the “parasitic bourgeoisie” were benefiting from the transaction because these bourgeoisie were “loyal and disciplined cadres” of the ANC.
The political storm around this transaction can only be attributed to the fact that some of the Elephant Consortium members who stand to benefit from this transaction are members of Congress of the People (Cope). In December last year SACP secretary-general Blade Nzimande made ridiculous claims that Cope was funded through the proceeds of the transaction.
He said: “We also call on the government to reverse the scandalous Telkom Christmas gift of Vodacom shares to private shareholders at a cut-price rate, and the selling of these to Vodafone. In particular, the role of the director-general in the department of communications, and of the former ANC presidency spokesperson Smuts Ngonyama and his Elephant Consortium, in this ripping off of what was once a national asset, requires close scrutiny. We believe that some of the proceeds of this hurried fire sale are finding their way into the war chest of the Shikota gang of three.”
It is rather alarming that Cosatu has decided to disregard the North Gauteng High Court’s decision, which dismissed its application to halt the transaction from going ahead. Cosatu said it will continue to oppose the listing by all means including launching a boycott of Vodacom. The vigour with which Cosatu is opposing this transaction should be directed at ensuring the job losses caused by the slowdown in the economy are minimised. Cosatu and the SACP should be working with the government and business to find lasting solutions to the challenges confronting the faltering economy instead of embarking on cheap politicking that could prove disastrous to the country’s image as an investment destination.
The current ANC leaders and their alliance partners made “political interference” their rallying cry before the elections, giving hope to many that there would be changes in the way the administration relates with other institutions and stakeholders in the economy. Icasa’s decision to rescind the Vodacom/Vodafone transaction immediately after the new administration had come into office and after Cosatu had filed court papers raises serious questions about their independence and this could impact investor confidence.
The unbridled interference and deliberate attempt to influence the Vodacom/Vodafone transaction for political reasons is shocking. There appears to be a nauseating repetition by the ANC alliance partners of what the previous ANC government had been accused of.
The ANC and its alliance partners must take the nation and local and foreign investors in their confidence and demonstrate their respect for the independence of regulatory bodies such as Icasa, not only in words but in deeds. The negative consequences of such developments on the country’s reputation as an investment destination are too grave to contemplate, especially when South Africa, together with the rest of the developing world, compete for capital inflows.
Independent regulatory bodies must be allowed to discharge their mandate without any undue political pressure and without fear and favour. The ANC government should equally be putting measures in place to stabilise the economy, respond to the effects of the global economic downturn and curb job losses while building a firm base for sustained growth and competitiveness.
It’s time the ANC and its alliance partners demonstrate that indeed together we can do more in order to build a unified and prosperous South Africa. Divisive and toxic politicking should be a thing of the past, we must all focus on collectively confronting our common challenges with unwavering determination.