May 18 2009 – South Africa may not be as business-friendly as was being hoped, despite the election promises from new South African president Jacob Zuma.
The international business world was left reeling over the weekend by an attempt by the country’s co-ruling trade-union federation Cosatu to block a $2,5-billion foreign investment listing of UK-based Vodacom — this would have been the biggest listing on the Johannesburg stock exchange this year, and the biggest deal for South Africa in the past decade.
The country’s communications regulator, the ‘Independent‘ Communications Authority of South Africa ( Icasa ) had suddenly joined forces with Cosatu to launch an urgent court interdict to stop the listing of Vodacom on the Johannesburg Stock Exchange, which was scheduled to take place on Tuesday, May 19, tomorrow.
However, Vodacom ‘s listing got the go-ahead when a Pretoria High Court judge ruled against Cosatu's urgent interdict attempt – and even the ANC-government has now apparently taken sides against its own labour movement. The High Court in Pretoria on Monday ruled in favour of Vodacom and dismissed the application by Cosatu and Icasa to prevent its listing on the JSE on Monday. see also see Vodacom
The listing, which now hangs in the balance because the trade unionists now are threatening with boycots, follows state-controlled Telkom ’s sale in March of 15% of Vodacom to UK telecommunications giant Vodafone for R22.5-billion ($2,5-billion)
The country’s communications regulator shocked the markets on Friday when it reversed its earlier claim that their ruling ‘wasn’t necessary’ for this deal – but then suddenly announced that it would join the trade union movement’s urgent interdict to try and stop the listing…. The rand weakened by 3% immediately after the announcement. see Rand slumps on Vodacom setback
The Vodafone deal values Vodacom at R150-billion, which would make it the seventh-biggest company on JSE. In March this entire deal had already been approved by Telkom shareholders – who of course include a great many government leaders -- before being approved by the Competition Commission.
Icasa also initially claimed that the deal ‘didn’t need its approval’, but then suddenly changed its mind on Friday -- less than a week after the new president, Jacob Zuma was inaugurated. This happened despite several international road shows by President Jacob Zuma, left, and senior ANC leaders, where they promised investors that ’ it will be business as usual under his presidency’.
Message: ‘South Africa is closed for investment’:
Analysts have expressed dismay at this latest shambles -- saying it ‘sends a strong message that SA 'was closed for investment'.
ICT analyst Lindsey McDonald was quoted as saying that the move would be viewed as ‘meddling by the new government’. And Analyst Dobek Pater said he was also unsure about Icasa’s motives. “This is possibly a case of the new government applying pressure to block the deal…” The deal, which would add to a growing list of leading South African companies to have relocated or sold big stakes to foreign investors in recent years, has been a hot political topic and is seen by business as a first test of the new government led by Jacob Zuma’s presidency.
Trying to block the listing less than 24 hours before it was due to go ahead could 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, analysists say. 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 state-owned company to a foreign firm.’
Cosatu threatens boycot of Vodafone
And, said Cosatu spokesman Patrick Craven on Monday, Cosatu would continue to oppose the listing by all legal means including launching a boycott of the telecommunications giant.
Investors in South Africa are watching the new government’s first moves, especially after the appointment of senior trade unionists to economic policymaking positions – who were appointed partly as a response to the slow pace of ‘poverty reduction’ under previous governments.
links:
Vodacom threatened with boycott Vodacom listing gets go-ahead http://www.vodacom.co.za/ Trade Union federation tries to shoot down the deal of the decade in South Africa:
1 comment:
u have to ask yourself why ?
May 18 2009 – South Africa may not be as business-friendly as was being hoped, despite the election promises from new South African president Jacob Zuma.
The international business world was left reeling over the weekend by an attempt by the country’s co-ruling trade-union federation Cosatu to block a $2,5-billion foreign investment listing of UK-based Vodacom — this would have been the biggest listing on the Johannesburg stock exchange this year, and the biggest deal for South Africa in the past decade.
The country’s communications regulator, the ‘Independent‘ Communications Authority of South Africa ( Icasa ) had suddenly joined forces with Cosatu to launch an urgent court interdict to stop the listing of Vodacom on the Johannesburg Stock Exchange, which was scheduled to take place on Tuesday, May 19, tomorrow.
However, Vodacom ‘s listing got the go-ahead when a Pretoria High Court judge ruled against Cosatu's urgent interdict attempt – and even the ANC-government has now apparently taken sides against its own labour movement. The High Court in Pretoria on Monday ruled in favour of Vodacom and dismissed the application by Cosatu and Icasa to prevent its listing on the JSE on Monday. see also see Vodacom
The listing, which now hangs in the balance because the trade unionists now are threatening with boycots, follows state-controlled Telkom ’s sale in March of 15% of Vodacom to UK telecommunications giant Vodafone for R22.5-billion ($2,5-billion)
The country’s communications regulator shocked the markets on Friday when it reversed its earlier claim that their ruling ‘wasn’t necessary’ for this deal – but then suddenly announced that it would join the trade union movement’s urgent interdict to try and stop the listing…. The rand weakened by 3% immediately after the announcement. see Rand slumps on Vodacom setback
The Vodafone deal values Vodacom at R150-billion, which would make it the seventh-biggest company on JSE. In March this entire deal had already been approved by Telkom shareholders – who of course include a great many government leaders -- before being approved by the Competition Commission.
Icasa also initially claimed that the deal ‘didn’t need its approval’, but then suddenly changed its mind on Friday -- less than a week after the new president, Jacob Zuma was inaugurated.
This happened despite several international road shows by President Jacob Zuma, left, and senior ANC leaders, where they promised investors that ’ it will be business as usual under his presidency’.
Message: ‘South Africa is closed for investment’:
Analysts have expressed dismay at this latest shambles -- saying it ‘sends a strong message that SA 'was closed for investment'.
ICT analyst Lindsey McDonald was quoted as saying that the move would be viewed as ‘meddling by the new government’.
And Analyst Dobek Pater said he was also unsure about Icasa’s motives. “This is possibly a case of the new government applying pressure to block the deal…”
The deal, which would add to a growing list of leading South African companies to have relocated or sold big stakes to foreign investors in recent years, has been a hot political topic and is seen by business as a first test of the new government led by Jacob Zuma’s presidency.
Trying to block the listing less than 24 hours before it was due to go ahead could 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, analysists say.
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 state-owned company to a foreign firm.’
Cosatu threatens boycot of Vodafone
And, said Cosatu spokesman Patrick Craven on Monday, Cosatu would continue to oppose the listing by all legal means including launching a boycott of the telecommunications giant.
Investors in South Africa are watching the new government’s first moves, especially after the appointment of senior trade unionists to economic policymaking positions – who were appointed partly as a response to the slow pace of ‘poverty reduction’ under previous governments.
links:
Vodacom threatened with boycott
Vodacom listing gets go-ahead
http://www.vodacom.co.za/
Trade Union federation tries to shoot down the deal of the decade in South Africa:
http://www.fin24.com/articles/default/display_article.aspx?ArticleId=2516817
http://www.fin24.com/articles/default/display_article.aspx?ArticleId=2517860
http://www.fin24.com/articles/default/display_article.aspx?Channel=News_Home&ArticleId=1518-24_2518044&IsColumnistStory=False
http://www.jse.co.za/jse_general.jsp
http://www.anc.org.za/show.php?doc=ancdocs/pr/new.html
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