The news:
- The Supreme Court of Appeal (SCA) has ruled that Vodacom Group Limited should pay between 5% to 7.5% of the total revenue share from the Please Call Me (PCM) service over the last 18 years (March 2001 to March 2021) with interest to Kenneth Nkosana Makate, a former employee and idea-man for Please Call Me (PCM).
- But the South African mobile communications company telco has warned that the judgment will severely impact its operations if upheld.
- According to the telco, if this ruling is upheld, the negative ripple effect will affect not only its employees and shareholders but also the country’s public finance, to which it contributes significantly.
Vodacom also stated that the development will also impact its network investment, coverage and social programmes. It also highlighted the unintended consequences of the ruling portraying South Africa as an unattractive investment destination.
Makate is set to receive compensation within the range of R29 billion ($1.5 billion) to R55 billion ($2.8 billion) when calculated using the parameters stipulated by the SCA,
Additionally, the ruling noted that Makate is entitled to 27% of the voice revenue from the PCM messages sent daily.
The company has approached the Constitutional Court to apply for leave to appeal the Supreme Court verdict.
Expressing its disappointment with the outcome of the case in a statement on Wednesday, February 28, Vodacom reiterated that it’s a responsible corporate citizen with absolute regard for the judicial system and strict compliance with South Africa’s rule of law.
The telco explained that it has carefully considered the SCA judgment and order and categorically disagrees with key aspects of the case, which it claims don’t follow the spirit of the law. The company find the judgment and order to be “fundamentally flawed.”
Vodacom said its application at the Constitutional Court for leave to appeal the SCA ruling includes valid arguments, including the SCA’s misdirection of itself by overseeing and passing a verdict on matters that were not brought to it for adjudication by either Makate or Vodacom.
Vodacom and Makate have been in a legal tussle over the PCM service, which the former employee reportedly came up with in 2000, since 2008.
The telco claims it had previously tried to negotiate a reasonable compensation with Makate, but says “These efforts, to date, unfortunately, have failed.”
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The company stated that it remains open to good faith dialogue and negotiations to reach a reasonable compensation, without “prejudice to its Constitutional Court appeal process.”
Shameel Joosub, Vodacom Group CEO, had determined a compensation package to the tune of R47 million to Makate, following a 2016 Constitutional Court order. But Makate reportedly rejected the offer, applying with the Gauteng division of the High Court to overrule Joosub’s offer.
On February 8, 2022, the High Court ruled that Joosub reconsider the compensation, setting aside the initial offer. Later the same month, Vodacom applied to appeal the High Court's judgement and order.
