Secrecy around Cell C shareholding scheme

Secrecy around Cell C shareholding scheme

Cell C’s recent filing with the Independent Communications Authority of South Africa (ICASA) revealed a strange shareholding structure which the company would not comment on.

On 22 December 2020, Cell C responded to ICASA’s Invitation to Apply (ITA) for IMT spectrum with a comprehensive application document.

As part of its application, Cell C provided a breakdown of its current shareholding as required by the regulator.

Cell C currently has seven shareholders, with Blue Label Telecoms holding a large chunk of the issued share capital.

  • The Prepaid Company (Blue Label Telecoms) – 45%
  • Magnolia Cellular Investment – 16%
  • Net1 Applied Technologies South Africa – 15%
  • Cedar Cellular Investment – 11.8%
  • Albanta Trading 109 – 5%
  • A group of former managers of Cell C (M5) – 5%
  • Yellowwood Cellular Investment – 2.2%

What grabbed the attention of some stakeholders was the group of former managers of Cell C, known as “M5”.

During negotiations related to Cell C’s recapitalization and new shareholding, an initial M10 Cell C shareholder group was formed which included numerous Cell C executives.

In a circular to Blue Label shareholders on 27 June 2017, the company announced a new M5 group replaced the original M10 group.

The M5 group consisted of four former Cell C executives – Jose Dos Santos, Robert Pasley, Graham Mackinnon, and Hilton Coverly – who held 5% of Cell C’s issued share capital.

In the ICASA filing on 22 December 2020, however, Cell C added former Cell C executives Daniel Bakker and Douglas Leslie Mattheus to the group.

MyBroadband received information that Bakker and Mattheus have already left the M5 group when Blue Label Telecoms closed its recapitalisation deal with Cell C.

It is therefore not clear whether Bakker and Mattheus joined the group after August 2018, or whether Cell C provided incorrect shareholder information to ICASA.

The table below provides an overview of the members which are listed as M5 and Cell C shareholders on the two different dates.

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