Disquiet ahead of court verdict

Pretoria - A South African court will decide on Sunday whether this week's listing of mobile phone company Vodacom can proceed after last-minute objections from the industry regulator and a powerful trade union group.

The hearing in the North Gauteng High Court in Pretoria is due to start at 10am.

It is not known how long it will take the judge to rule on the Cosatu union federation's application for an injunction to block Monday's planned listing, which will be one of the Johannesburg bourse's biggest if it goes ahead.

Blocking the listing less than 24 hours before it was due to go ahead would deal a huge blow to South Africa's credentials as an investor-friendly emerging market and intensify fears of renewed union power under new president Jacob Zuma.

The listing of Vodacom, which some analysts have valued at more than R70bn, is the final part of a plan by fixed line operator Telkom to get rid of its 50% stake in the country's biggest mobile operator.

Under the plan, Britain's Vodafone has agreed to buy 15 percent of the company for R22.5bn, giving it a controlling 65% stake. Telkom will then distribute its remaining 35% to shareholders.

Cosatu, which regards Zuma as a political ally, has long opposed the deal on the grounds that it threatens jobs and cedes control of a key South African company to a foreign firm.

The Independent Communications Authority of South Africa (Icasa), the industry watchdog, said in April the deal did not need its approval, but suddenly changed its mind on Friday - less than a week after Zuma was inaugurated.

The rand fell as much as 3 percent amid fears that it was an early indication of the unions and the left wing of Zuma's ruling ANC being able to sway policy in Africa's biggest economy.

Vodacom vowed to contest the injunction application.

"We are opposing," the company said in a terse statement.

On Friday, ICASA demanded a public "consultation" on Telkom's sale of its stake to Vodafone. It has given few details of its plans other than to say hearings should take place by mid-June.

Nobody from Icasa was available for comment on Saturday.

However, the Weekender newspaper published an SMS from ICASA councillor Marcia Socikwa that muddied the picture, and raised questions about the watchdog's jurisdiction in stock market matters.

Stunning volte face

"ICASA has no jurisdiction on the JSE. Vodacom is a licensee and thus falls within our jurisdiction. A public process, based on consultation with all stakeholders, is best basis on which to make a decision," the SMS said.

The paper said a subsequent message clarified that the listing could not proceed "until the public process and a subsequent decision".

Before the injunction bid, JSE chiefs said the listing remained "on track" for Monday.

"The listing is on track and we're awaiting a decision or advice from Vodacom as to how they want to proceed," JSE deputy chief executive Nicky Newton-King told Reuters.

Cosatu spokesperson Patrick Craven denied any link between the timing of Icasa's stunning volte face on Friday and Zuma's accession to the presidency on May 9.

"That's purely coincidental," Craven said. "The key question is 'What legal power does Icasa have?'"

- Reuters