Telecommunications service provider Cell C on Thursday refuted that its recapitalisation amounted to a transfer of control that would have required approval from the Independent Communications Authority of South Africa (Icasa).

“Based on extensive legal advice, there has not been any transfer of control and no approval is required. Cell C is in the process of submitting extensive information to Icasa.

“It is unclear why Icasa has reached the conclusion that the transaction [should] have been filed as an application for change of control of the licensee without first having heard Cell C’s position,” said Cell C spokesperson Vinnie Santu.

In a statement issued on Wednesday, Icasa confirmed that it had received a notification from Cell C regarding the change of licensee information, meaning a change of shareholding.

“The authority [Icasa] has considered the notification and the preliminary view is that the Cell C recapitalisation transaction – on the face of it – triggers the provisions of Section 13 of the Electronic Communications Act and ought to have been filed as an application for change of control of the licensee,” Icasa spokesperson Paseka Maleka said.

The authority is engaging Cell C to seek clarity on this apparent noncompliance with the legislative provisions.

In addition, it is also taking external legal advice on the matter, including on appropriate enforcement actions it can take to ensure compliance.

Cell C, meanwhile, pointed out that Icasa had indicated that its finding was its “preliminary view” and it had not yet given the company any indication (despite repeated requests from Cell C) why it has taken this view or what process it is following.

It is, therefore, difficult for Cell C to engage with Icasa’s views, said Santu.

“Notwithstanding this, Cell C will submit detailed and extensive information to Icasa and welcomes the opportunity to engage further regarding this transaction that has ensured the survival of the company as a sustainable competitor in the sector, increased ownership by historically disadvantaged individuals and saved thousands of jobs.”

JSE-listed Blue Label Telecoms earlier this month confirmed it had completed the R5.5-billion recapitalisation of Cell C, gaining a 45% stake in the mobile operator. The recapitalisation involved five companies and an employee and management shareholding scheme and helped to reduce Cell C’s debt from nearly R20-billion to less than R6-billion.