Lesotho Communications Authority (LCA) has in a latest bid to push Vodacom Lesotho (VCL) to pay a 40 million maLoti (M) ($2 million) fine which was due Wednesday last week.
This comes after LCA backtracked its earlier decision to revoke the mountain kingdom’s biggest telecom operator VCL’s license late last month and imposed a M134 million fine over non-compliance with the provisions of the latter’s license, and failure to appoint independent auditors between 2015 and 2019.
LCA announced VCL was supposed to pay M40 million-a 30 percent of the M134 million by the 7th of October this year while the 70 percent is suspended for five years.
The arrangement was that failure to pay the fine by VCL would result in LCA revoking the former’s unified license.
“Notice is hereby given of the revocation of the Unified License of Vodacom Lesotho (PTY) Ltd in accordance with the Communications Act, 2012 for failure to comply with the directive to pay a penalty of M40 200 000 by 7 October 2020,” reads a notice from LCA on Thursday.
But VCL is remaining defiant and has vowed to file an urgent application with the High Court of Lesotho.
“Vodacom Lesotho confirms that it will lodge an urgent application in the High Court of Lesotho to have reviewed and set aside the decisions of the LCA, imposing a fine for a staggering sum of M134 million for alleged contraventions of section 97 of the Companies Act, 2011 and certain conditions of its unified license,” Tsepo Ntaopane, a VCL legal and external affairs representative said in a media release on Thursday.
Ntaopane said in the same application, VCL will be challenging the lawfulness of the LCA’s decision, set out in a notice dated 8 October 2020, revoking its unified licence.
Philip Amoateng, VCL managing director, said they had to approach the courts. “We have no option but to seek relief in the courts because the LCA’s decisions imposing an excessive fine as well as the revocation of Vodacom’s operating license are both erroneous as a matter of law and public policy.”
VCL said in terms of the law they had 14 days to approach the High Court of Lesotho and they had notified LCA of such intentions. “The LCA has unfortunately violated its prescripts and rules and our efforts to find an amicable solution to the dispute has drawn a complete blank,” said Amoateng.
“Given the hostility shown by the LCA towards Vodacom, our options are now limited to seeking redress in the courts to avert further damage to our brand, reputation and the interests of stakeholders, including our customers, shareholders and employees.”
The tension between LCA and VCL dates back to 2015 when LCA refused to comply with a directive to appoint a new auditor replacing an auditor who is a relative of VCL’s board chairman.
LCA said between 2015 and 2019 VCL contravened its licence conditions by submitting audited financial statements that were unaccompanied by a certification issued by an independent external auditor but instead signed by the chairman’s relative.
In February this year VCL was fined $5 million by LCA for the failure to replace the chairman’s relative as its auditor with an independent external auditor from 2015 to 2019.
VCL was also given about $54 000 to connect the internet to 30 schools but it failed to report progress even after some schools complained that they were not connected.
The revocation of VCL’s license will see thousands of people directly and indirectly employed by the telecom giant losing their jobs. VCL, which was launched in 1996, boasts of its 1.2 million subscribers and over 600 000 M-Pesa users, a mobile money service provider.