My wife, family, and friends – all Vodacom investors – have questioned why I insist the company must pay Nkosana Makate billions for his “Please Call Me” (PCM) invention, writes Gugu Lourie in the Sunday Times.
I argue that R9.4bn is fair compensation, yet Vodacom has fought Makate in court for 25 years.
Meanwhile, Vodacom’s auditors, Ernst & Young (E&Y), claim the potential PCM liability is “immaterial” in audited financial statements.
Vodacom’s reports state: “Vodacom is continuing to challenge the level of compensation payable to Makate and a provision immaterial to the financial statements has been recorded.”
To explain this to my loved ones, I investigated why E&Y deemed the provision insignificant. After reviewing their reasoning, I fear this isn’t just spin—it may be a dangerous misrepresentation.
By downplaying the liability, E&Y could be helping Vodacom inflate earnings and mislead shareholders, reminiscent of Enron before its collapse.
I hope I’m wrong.
For more read: Are Vodacom’s auditors hiding a financial time bomb?
Vodacom Says Please Call Me Compensation Range Still Uncertain
By Gugu Lourie
Vodacom has disclosed that the potential compensation payout in the long-running Please Call Me case remains highly uncertain, with outcomes ranging from millions to billions of rand.
The Vodafone-owned telco is still challenging the Supreme Court of Appeal’s (SCA) ruling, which ordered it to pay 5%–7.5% of total revenue from the service since 2001.
In a statement published today as part of its financial results publication, Vodacom said:
“Consequently, the range of the possible compensation outcomes in this matter is very wide. The amount ultimately payable to Mr. Makate is uncertain and will depend on the success of Vodacom’s appeal against the judgment and order of the SCA, on the merits of the case.”
The company has recorded a provision immaterial to its financial statements as it continues to dispute the compensation level.
Background of the Case
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In 2016, the Constitutional Court ruled that Vodacom must compensate Nkosana Makate, the inventor of the Please Call Me service.
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Vodacom’s CEO initially offered R47 million in 2019, which Makate rejected.
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The SCA later ruled in Makate’s favour, ordering 5%–7.5% of total revenue (estimated at R29 billion minimum).
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Makate is demanding R9.4 billion plus interest.
Pending Constitutional Court Decision
Vodacom filed an appeal with the Constitutional Court, which heard arguments on 21 November 2024.
However, six months later, a judgment is still pending.
Last week, the Office of the Chief Justice (OCJ) confirmed to TechFinancials that:
“A date for the handing down of judgment… is yet to be set. Parties will be informed when the Court is ready.”
