By Gugulakhe Lourie
PRETORIA (Reuters) - A South African court will decide on Sunday whether this week's listing of mobile phone company Vodacom can proceed after last-minute objections from the industry regulator and a powerful trade union group.
Pretoria's North Gauteng High Court said it would make a ruling by 7 p.m. (6:00 p.m. British time) on the COSATU union body's request for an injunction blocking Monday's listing, which will be one of the Johannesburg bourse's biggest if it goes ahead.
Blocking the deal on its eve would deal a huge blow to South Africa's credentials as an investor-friendly emerging market and intensify fears of resurgent union clout under new president Jacob Zuma.
The listing of Vodacom, which some analysts have valued at more than 70 billion rand (5.3 billion pounds), is the final part of a plan by fixed-line operator Telkom <TKGJ.J> to get rid of its 50 percent stake in the country's biggest mobile operator.
Under the plan, Vodafone <VOD.L> has agreed to buy 15 percent of the company for 22.5 billion rand, giving it a controlling 65 percent stake. Telkom will then distribute its remaining 35 percent to shareholders.
COSATU, which regards Zuma as a political ally, has long opposed the deal on the grounds that it threatens jobs and cedes control of a major South African company to a foreign firm.
U-TURN
The Independent Communications Authority of South Africa (ICASA), the industry watchdog, said in April the deal did not need its approval, but suddenly changed its mind on Friday, less than a week after Zuma was inaugurated.
The rand fell as much as 3 percent amid fears that it was an early sign that the unions and the left wing of Zuma's ruling ANC could sway policy in Africa's biggest economy.
Vodacom vowed to contest the injunction bid.
"We are opposing," the company said in a terse statement.
On Friday, ICASA demanded a public "consultation" on Telkom's sale of its stake to Vodafone. It has given few details of its review plans, other than to say hearings should take place by mid-June.
Nobody from ICASA was available for comment on Saturday or Sunday.
Saturday's Weekender newspaper published an SMS from ICASA councillor Marcia Socikwa that muddied the picture and raised questions about the watchdog's right to meddle in stock market matters.
"ICASA has no jurisdiction on the JSE. Vodacom is a licensee and thus falls within our jurisdiction. A public process, based on consultation with all stakeholders, is best basis on which to make a decision," the SMS said.
The paper said a subsequent message clarified that the listing could not proceed "until the public process and a subsequent decision."
Before the injunction bid, JSE chiefs said they were ready to go ahead on Monday.
"The listing is on track, and we're awaiting a decision or advice from Vodacom as to how they want to proceed," JSE Deputy Chief Executive Nicky Newton-King told Reuters.
COSATU spokesman Patrick Craven denied any link between the timing of ICASA's volte face on Friday and Zuma's accession to the presidency on May 9.
"That's purely coincidental," Craven said. "The key question is 'What legal power does ICASA have?'"
(Writing by Ed Cropley, editing by Will Waterman)