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 p.m. British time) on the COSATU union body's request for an injunction blocking Monday's listing -- which would be one of the Johannesburg bourse's biggest.
Halting 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 a 15 percent stake from Telkom for 22.5 billion rand, giving it a controlling 65 percent holding. 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 it was an early sign of the unions and the left wing of Zuma's ruling ANC managing to sway policy in Africa's biggest economy.
The opposition Democratic Alliance attacked ICASA's volte face as a "direct assault on any attempt to encourage foreign investment in South Africa."
"To behave in such a ham-fisted fashion sends precisely the wrong signal to foreign investors," the party, which came a distant second to the ANC in last month's election, said in a statement.
On Friday, ICASA demanded a public "consultation" on Telkom's sale of its stake to Vodafone, but gave few details other than to say hearings should take place by mid-June.
Nobody from ICASA was available for comment on Saturday or Sunday. An SMS from ICASA councillor Marcia Socikwa published in the Weekender newspaper raised questions about the watchdog's right to meddle in Johannesburg Stock Exchange (JSE) 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 paper quoted the SMS as saying.
Vodacom vowed to fight the injunction bid and JSE bosses said they were ready to proceed on Monday if given the green light.
"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 denied any link between the timing of ICASA's U-turn on Friday and Zuma's accession to the presidency on May 9.
"That's purely coincidental," spokesman Patrick Craven said. "The key question is 'What legal power does ICASA have?'"
(Writing by Ed Cropley, editing by Will Waterman)