The Information Communication Technology Union (ICTU) wants Blue Label Telecoms to explain how the JSE-listed company can zero rate its stake in Cell C but remain the mobile phone operator’s main revenue generator.
ICTU, which is an affiliate of the South African Federation of Trade Unions led by Zwelinzima Vavi, is the sole worker representative at Cell C. The union wants to know if Blue Label Telecoms is using Cell C as a “piggy bank.”
Blue Label Telecoms, Nasdaq, and JSE-listed Net 1 have all written down to zero the value of their stakes in Cell C.
Last month, Blue Label Telecoms reported tentative signs of recovery after it wrote down its stake in Cell C. The embattled mobile network was a drag on Blue Label Telecoms’ financials.
As the carrying value of Blue Label’s investment in Cell C was fully impaired for the year ended May 2019, the financial results of the mobile network company did not have any impact earnings for the current year.
Today, ICTU submitted a memorandum to Blue Label Telecoms, asking the company to clarify several concerns, including retrenchments at Cell C.
“We are seeking a detailed explanation of how Blue Label Telecoms can zero rate the value of Cell C as a company and yet remain Cell C’s main revenue generator,” ICTU wrote in a memorandum to Blue Label Telecoms, which was seen by TechFinancials.
The memorandum further seeks:
• A detailed report on Blue Label Telecoms subsidiary of companies that generate revenue from Cell C and have a direct impact and influence on the imminent jobs bloodbath.
• Explanation of the lack of interest displayed by you as principal revenue beneficiaries endorsing the retrenchments and job losses of over 1,500 employees
• The disclosure of your percentage stakeholder reduction and the effective date thereof.
• We seek the disclosure on the impact of Cell C financial performance towards the overall Blue Label Telecoms results and its contribution towards the Cell C 189 retrenchments that are underway.
• We seek clarity on the recap undertaken by yourselves through the Competition Commission with an indication to save jobs.
The ICTU gave Blue Label Telecoms until Friday next week to respond.
— Joscey (@Joscey2) September 11, 2020