Vodacom Group and former employee Kenneth Makate are set to enter private negotiations to discuss remuneration for the popular callback phone service he proposed more than 20 years ago in a bid to reach an out-of-court settlement.
South Africa's Supreme Court of Appeal's majority judgment in February will entitle Mr. Makate to between R29 billion ($1.55 billion) and R63 billion in damages, based on his mobile network business. It would have “catastrophic consequences” for the company, its employees, investors and Johannesburg. Vodacom, which is based in , said in documents filed with the Constitutional Court on February 26 to appeal against the SCA ruling.
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Read: Vodacom opposes order to pay billions of rands to former employees
The lawsuit between Vodacom and Makate has waxed and waned over the years over compensation for the “Please Call Me” idea he pitched to the company's product development team while working in finance in the 2000s.
“Vodacom has asked for a closed-door meeting and I will certainly engage accordingly,” Makate said in response to a question on Monday, adding that the meeting was scheduled for Tuesday. He also said he would file opposition papers with the Constitutional Court on Monday.
A 2016 order from the Constitutional Court said Vodacom chief executive Shamir Joosab should be paid fair remuneration, which Joosab calculated at the time to be R47 million.
Vodacom declined to comment on the matter.
Read: Makate’s legal victory against Vodacom is also a victory for litigation funding
Vodacom, part of Vodafone Group, said a payout of the scale outlined in the February court ruling would disrupt the broader black economic empowerment structure known as Yebo Yetu because it would trigger a so-called trigger event. Stated. His one share of Vodacom Group stock is less than the debt of his Yebo Yethu, which has about 80,000 black shareholders.
“Shareholders' investments in the Fund will be extinguished, effectively dissolving it,” Vodacom said in court documents.
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Mr Makate said Vodacom's observations about Yebo Yetu were “simply misleading”.
Read: Please call me Inventor wants more than R10 billion
The R40 billion dividend wiped out 20% of Vodacom's market value and had a “direct impact” on major institutional investors, including the state-run Public Investment Corporation, which manages civil servants' pension funds and has around 1.3 million active members. ” will be given. According to mobile phone companies, there are 473,000 pensioners.
“Simply put, the harm the majority judgment will cause to Vodacom far exceeds the amount paid to Mr. Makate,” the company said.
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