In a legal saga spanning over a decade, Vodacom finds itself entangled in a multimillion-dollar compensation battle with Kenneth Nkosana Makate, the purported mastermind behind the iconic "Please Call Me" (PCM) service. The latest twist in this prolonged courtroom drama comes as a majority judgment from the Supreme Court of Appeal (SCA) could see Makate pocketing a staggering R29 billion, a figure that dwarfs previous settlement offers and legal expectations.
The origins of the dispute date back to 2000 when Makate, then a trainee accountant at Vodacom, allegedly conceived the idea for PCM—a service allowing users to send a text message requesting a call back from someone without airtime. Following the service's launch in March 2001, Vodacom acknowledged Makate's contribution internally. However, a contentious legal battle ensued as Makate sought rightful compensation for his brainchild.
After years of legal wrangling, including a ruling by the Gauteng High Court in 2014 that recognized the existence of a contract between Makate and Vodacom, the case found its way to the Constitutional Court. In a landmark decision, the apex court mandated both parties to negotiate in good faith for a fair compensation amount. However, negotiations faltered when Vodacom's CEO offered Makate a comparatively paltry sum of R47 million, which he promptly rejected.
Subsequent legal maneuvers saw Vodacom challenging the High Court's decision, only to be rebuffed by the SCA on February 6, 2024. The SCA's ruling, entitling Makate to 5% to 7.5% of PCM's total revenue from its inception to the date of judgment plus interest, sent shockwaves through the telecommunications industry. Vodacom's subsequent application for leave to appeal to the Constitutional Court underscores the gravity of the situation, as the potential liability of R29 billion looms large.
Vodacom contends that the SCA overlooked crucial evidence and issued orders that may be legally unenforceable. Nevertheless, the telecommunications giant acknowledges the uncertainty surrounding the final compensation amount, indicating a provision has been recorded in its financial statements to address the looming contingency. Amidst the legal quagmire, both Vodacom and Makate have resumed negotiations for an out-of-court settlement, shrouding the proceedings in secrecy.
As the legal battle reaches a critical juncture, the outcome holds significant ramifications not only for Vodacom and Makate but also for intellectual property rights and corporate accountability in South Africa. With the eyes of the nation fixed on the impending resolution, the long-awaited denouement of this high-stakes legal drama appears to be on the horizon.
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