Sale of Zamtel is illegal – Kavindele

Sale of Zamtel is illegal – Kavindele
Written by Chiwoyu Sinyangwe
Monday, August 10, 2009 2:19:49 AM

THE sale of 75 per cent shares in Zamtel to an equity partner as announced by President Rupiah Banda will not take place as doing so will be illegal, Vodacom Zambia Limited chairman Enoch Kavindele said yesterday. And Kavindele threatened to commence contempt of court proceedings against Zain Zambia Plc over the third generation (3G) license awarded to the company as announced last week.

During a press briefing in Lusaka, Kavindele said Vodacom Zambia Limited had instructed its lawyers to commence legal proceedings today to halt the planned sale of three-quarters of the country's largest Information Communication Technology (ICT) company.

Kavindele, a former Republican vice-president, said the injunction granted to Vodacom Zambia Limited by High Court judge Philip Musonda in October last year prohibits the entry of a new cellular telecommunication operator by way of merger, acquisition, investment, divesture and or buy-out of the existing mobile telecommunication providers until the final determination of the case in the Supreme Court.

He said the people in authority were tearing apart the rule of law they swore to uphold and defend through the proposed sale of 75 per cent shares of Zamtel as announced by President Rupiah Banda.

"I have been watching closely the debate being made on the privatisation of Zamtel and especially the sentiments coming from the government officials who know about the requirements of the very law they have sworn to uphold and defend," Kavindele said. "I wish to inform you that this highly publicised sale of Zamtel is almost a non-starter in present form. It has hit a legal snag."

Kavindele said President Banda had no authority to announce the sale of Zamtel as the issuance of telecommunication licence was a duty of Communications Authority - Zambia (CAZ).

"Only Communications Authority can privatise, give licence about telecommunication, it is not even the President not even the ministers, it's the Communications Authority that has that power under an Act of Parliament on July 1994 when the Communications Authority was set up. So, they are the authority," he said.

"We all operate below the law. There is no single individual who is above the law, and therefore this issue [of Zamtel privatisation] is quite serious in that in as much as somebody might have other intentions for wanting to privatise, but I expected that the President would be advised that there was a court injunction in place and until it is resolved, nothing can happen to Zamtel or indeed any other matter dealing with communications in this country. In other words, no one can come to Zambia and want to buy even Zain until the matter of Vodacom Zambia is resolved. No one can come to Zambia and invest or buy out 75 per cent of Zamtel until the matters that are in the Supreme Court are resolved."

Kavindele has since written to communications minister Professor Geoffrey Lungwangwa about the intentions of Vodacom Zambia Limited to commence legal proceedings to halt the planned partial privatisation of Zamtel.

Kavindele stated to Prof Lungwangwa that the sale of Zamtel could not take place as a result of the prevailing High Court injunction.

According to the letter addressed to Prof Lungwangwa and copied to Vice-President George Kunda, Attorney General Mumba Malila and Vodacom Zambia lawyers, Malambo and Company, Kavindele stated that the rule of law in the country was under threat.

"Honourable Minister, as chairman of Vodacom Zambia, I have no desire to politicise this matter; however, having spent in excess of 20 years as member of parliament participating in the enactment of laws in Zambia, I am compelled to act as I cannot be expected to sit idle and observe the rule of law being torn to shreds by the Communications Authority or by those who have taken oath to uphold and defend the very laws that are now being threatened," Kavindele stated.

According to the ex parte order for interlocutory injunction granted to Vodacom Zambia by judge Musonda on October 3, 2008, CAZ had been restrained further publishing any invitation to tender or grant any mobile licence whatsoever kind to any national mobile cellular operator for Zambia or any related cellular technology whether it be via broadband, WiMAX, data, Spectrum allocation in any available frequency, 2G, 3G, 3.5G, 4G, GSM, CDMA, mobile data, Wi-Fi, Cable, DSL, Hotsport, Voice Over Internet Protocol and Internet Protocol Television (IPTV).

"And further, the defendant by itself, its chief executive/controller, directors/ regulators, servants or agent or howsoever or otherwise be and are hereby restrained by an order of injunction from attempting to introduce any other Cellular telecommunications operator(s) by way of merger/acquisition/investment/divesture and or buy-out of any existing mobile telecommunication providers until after the final determination of the defendants appeal in the Supreme Court or until further notice," said judge Musonda.

The injunction followed judge Musonda's earlier ruling that Vodacom Zambia Limited was lawfully granted and still holds the fourth national cellular mobile licence for Zambia.

This is in a case where Vodacom Zambia Ltd sued the Communications Authority over their decision to invite tenders from the public for the award of the fourth national mobile cellular service licence in Zambia.

However, CAZ appealed to the Supreme Court over the High Court ruling on the instruction of former communications minister Dora Siliya.

According to official statement from CAZ advertised in the newspapers last March, the regulator announced the suspension of issuance of Telecommunication Licence until the outcome of CAZ appeals to the Supreme Court or until further notice.

No new announcement had been issued by CAZ since then, and that the suspension included pending application with the regulator.

Kavindele vowed that even if the government disregarded the laws of the country and proceeded with the privatization of Zamtel, Vodacom Zambia would seek legal recourse in the country of origin for the new equity partner.

"Assuming that the government ignores the laws of the country, then we can seek legal redress in the country where the strategic buyer of the 75 per cent Zamtel shares will come from," Kavindele said.

Meanwhile, Kavindele threatened to commence contempt of court proceeding against CAZ if Zain Zambia Plc did not stop any 3G related activities immediately.

According to the letter dated August 8, 2009 addressed to Zain Zambia Plc managing director David Holliday, Kavindele stated that it was against the High Court ruling for Zain Zambia to start operating 3G.

During the official opening of the new Zain offices in Lusaka last week, Holliday thanked the government for granting the company a 3G test licence.

"We have invested heavily in our 3G preparedness, complying with all legal requirements to ensure Zambia is not left out on the great technological advancements that are a key to national development," said Holliday. "This will allow us to deliver high speed broadband Internet with myriad applications from healthcare through 3G handsets, to incubating content entrepreneurs for youth and business alike."

But Kavindele told Holliday that: "Contrary to your statement that the Communications Authority had granted Zain a 3G licence with all legal 'requirements being met', we wish to bring to your attention the following: The Communications Authority is restrained from granting any licences relating to telecommunications in Zambia by way of High Court injunction issued against them in favour of Vodacom Zambia, this includes but is not limited to 3G licences."

Kavindele stated that Vodacom Zambia had instructed its lawyers to institute contempt of court charges against Communications Authority for issuing a licence to Zain Zambia when they were fully aware that they had been stopped from doing so by the High Court of Zambia.

"We have instructed our lawyers to institute court contempt charges against the Communications Authority and wish to advise Zain Zambia to cease any 3G-related activities with immediate effect failure to which you may face similar penal contempt of court charges," stated Kavindele.