South Africa union COSATU seeks to stop Vodacom listing

Monday, May 11, 2009

South Africa's government-allied labour federation COSATU, warning about the risks to jobs, is seeking a court order to stop the listing of telecom operator Vodacom.

Vodacom is due to debut on May 18 after joint owner Telkom, Africa's biggest fixed-line operator, distributes a 35 percent stake to shareholders and finalises a $2.6 billion deal to sell a further 15 percent to Britain's Vodafone Plc.

The listing, one of the biggest on the Johannesburg bourse in years, will give Vodafone a 65 percent stake in Vodacom and end a shareholder pact that restricted it to operations only in southern Africa.

COSATU was also seeking to block a communications watchdog decision that Vodacom was not obliged to obtain written approval for the transfer of Telkom's stake to Vodafone.

COSATU's general secretary Zwelinzima Vavi said the union was concerned that Telkom was disposing of its crown jewel and threatening the livelihood of its workers.

"We will obviously make an appication to have Vodacom listing delayed," Vavi told Reuters on Friday.

COSATU, an umbrella labour federation representing two million workers, said the deal was not in the interests of economic growth or job creation but would be "a big reversal of everything we want".

Vavi said the union was not in consultation with the ruling African National Congress on the matter.

Telkom said it would oppose COSATU's application.

COSATU's court application comes after a failed attempt by the Communications Workers Union to block Vodafone's plans.

The South African Communist Party (SACP), a partner in the governing alliance, has also called on the government to review, and preferably reverse, the deal.