{"id":30279,"date":"2013-01-22T02:44:43","date_gmt":"2013-01-22T00:44:43","guid":{"rendered":"http:\/\/businesstech.co.za\/news\/?p=30279"},"modified":"2013-01-22T09:10:38","modified_gmt":"2013-01-22T07:10:38","slug":"vodacom-killing-companies-wirelessg","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/mobile\/30279\/vodacom-killing-companies-wirelessg\/","title":{"rendered":"Vodacom killing companies: WirelessG"},"content":{"rendered":"

A PSG Capital<\/a> report and WirelessG<\/a> court documents note that Vodacom<\/a> is exercising negative control over WirelessG, preventing the company from raising capital or signing new shareholder partnerships.<\/p>\n

In the court documents, WirelessG said that it is constantly in the process of expanding its operations, which means the company has to raise capital for these expansions.<\/p>\n

However, Vodacom \u2013 which is a WirelessG shareholder and board member \u2013 is accused by Wireless G of exercising negative control on the company which prohibits WirelessG from signing new deals.<\/p>\n

According to WirelessG, in addition to Vodacom`s non-compliance to the shareholders agreement, Vodacom is deliberately (and with mala fide intent) implementing frustrative actions, which prohibit WirelessG from raising capital, and to cause its demise.<\/p>\n

PSG Capital report<\/h3>\n

WirelessG appointed PSG Capital as a corporate adviser to assist the company to implement a transaction with Blue Label Telecom<\/a>.<\/p>\n

PSG indicated that, while Vodacom is not exercising its shareholders obligation, any potential investor would require clarity insofar Vodacom`s intent and strategy with WirelessG before making any investment.<\/p>\n

For instance, a Blue Label Telecom transaction did not materialise and, according to WirelessG, the main reason for this was negative control by Vodacom.<\/p>\n

WirelessG included a report from PSG Capital in its court documents which stated that:<\/p>\n

\u201c\u2026it became clear to us that there existed an element of negative control in that the company will be prohibited from pursuing any capital raising exercise or introduction of a new strategic equity partner \u2026 for as long as Vodacom remains a significant shareholder\u2026\u201d<\/p><\/blockquote>\n

\u201cFrom the report it is quite evident that it remains very difficult for WirelessG to raise any capital under circumstances where Vodacom exercises negative control over WirelessG,\u201d the court document states.<\/p>\n

PSG Capital explained that its report to the WirelessG board was done on selected information available and that they were not privy to all discussions.<\/p>\n

\u201cThere are in most unlisted companies, however, usually shareholders agreements that contain certain negative control provisions, so same is not unusual per se to the Wireless\/Vodacom relationship that date back quite a while,\u201d said Johan Holtzhausen<\/a>, MD of PSG Capital.<\/p>\n

\u201cThe board merely asked us to comment on the timeline and issues that we encountered and the action is not based on our report.\u201d<\/p>\n

Vodacom killing businesses: WirelessG<\/h3>\n
\"Carel<\/a>

Carel van der Merwe<\/p><\/div>\n

WirelessG said further that Vodacom\u2019s conduct \u201cseems to be in accordance with the general modus aperandi of Vodacom, where the operator slowly cuts off the lifeblood of companies (in which it has a shareholding) for purposes of its own ultimate financial gain\u201d.<\/p>\n

\u201cIf the companies go under and are liquidated, Vodacom will be able to continue with its confidential information, business plans, corporate opportunities and ideas, without having to share profits.\u201d<\/p>\n

As stated in the court documents, the WirelessG CEO Carel van der Merwe<\/a>, was advised that Vodacom is in contravention of Section 163 of the Companies Act 71 of 2008 (provided below).<\/p>\n

A shareholder or a director of a company may apply to a court for relief if\u2014
\n(a) any act or omission of the company, or a related person, has had a result that is oppressive or unfairly prejudicial to, or that unfairly disregards the interests of, the applicant;
\n(b) the business of the company, or a related person, is being or has been carried on or conducted in a manner that is oppressive or unfairly prejudicial to, or that unfairly disregards the interests of, the applicant; or
\n(c) the powers of a director or prescribed officer of the company, or a person related to the company, are being or have been exercised in a manner that is oppressive or unfairly prejudicial to, or that unfairly disregards the interests of, the applicant.<\/p><\/blockquote>\n

WirelessG and Vodacom mum on the issue<\/h3>\n

WirelessG was not available for further comment, indicating that it has received an official invitation from Vodacom to negotiate the matter.<\/p>\n

Vodacom would also not comment. The operator confirmed that it has received an urgent application from WirelessG in December, but has been advised not to comment ahead of the court case.<\/p>\n

After a special request from WirelessG addressed to the deputy Judge President, a special hearing date has been approved without the necessity of proving urgency, as the matter is already regarded as urgent.<\/p>\n

WirelessG indicated further that the court case is officially scheduled for 8 April 2013. Vodacom still has to submit its response before 11 February 2013.<\/p>\n

More Vodacom and WirelessG articles<\/h3>\n

Vodacom vs WirelessG: billion rand blunder or storm in a teacup?<\/a><\/strong><\/p>\n

Vodacom in the dock over Wi-Fi contract<\/strong><\/a><\/p>\n

Vodacom investments under the spotlight<\/strong><\/a><\/p>\n

\u201cVodacom killed my business\u201d<\/strong><\/a><\/p>\n

Vodacom\u2019s The Grid shut down date<\/strong><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

A PSG Capital report suggests that Vodacom is exercising negative control over WirelessG, preventing the company from raising capital<\/p>\n","protected":false},"author":2,"featured_media":18442,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[34],"tags":[4717,26,27,2477],"class_list":["post-30279","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-mobile","tag-carel-van-der-merwe","tag-headline","tag-vodacom","tag-wirelessg"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/30279","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=30279"}],"version-history":[{"count":7,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/30279\/revisions"}],"predecessor-version":[{"id":30289,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/30279\/revisions\/30289"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/18442"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=30279"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=30279"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=30279"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}