Fraud claim as backers turn on 'Call Me' Makate
Makate is now embroiled in a legal spat with his one-time financial backers who allege that he is refusing to pay them what he owes
Drama has continued to ensue in the Please Call Me matter involving Nkosana Makate, who gave the idea for the service to Vodacom.
In the latest episode, Makate has opened a fraud case against his former funders, Raining Men Trade, which was placed in business rescue in January, allegedly after not receiving payment from Makate.
Raining Men Trade, a litigation-funding company, claims it bankrolled Makate's case in the North Gauteng High Court against Vodacom over compensation he said was due to him for the Please Call Me idea.
At the time, Raining Men Trade instructed Makate to settle for no less than R650m.
But Chris Schoeman, a director of Raining Men Trade, said this week the company had since changed its tune and wanted Makate to accept the R49m that Vodacom reportedly offered him in a settlement in January.
Schoeman said the company believed the offer was fair and said that, according to Raining Men Trade's funding agreement with Makate, the company was entitled to 50%, or R24.5m.
Makate's refusal to take the deal has left Raining Men Trade, an entity established primarily to obtain funds for the Please Call Me matter from various sources, in the lurch. "The business is stranded because Mr Makate is refusing to pay it," Schoeman said.
The settlement amount has not been verified by Vodacom and Makate as both are bound by a nondisclosure agreement.
But the details are likely to surface in court soon as Makate is unhappy with Vodacom's offer and is in the process of applying for a judicial review.
He offered the Please Call Me idea - which allows a cellphone user with or without airtime to request a return call from another user - to Vodacom in 2000 when he was a junior accountant there. The company reneged on a promise to pay him but in 2016 the Constitutional Court ordered Vodacom to enter discussions to determine reasonable compensation for Makate.
Schoeman said earlier this week that Raining Men Trade will apply to join the latest court case. "We are going to make the case that he should accept [Vodacom's offer]."
He said this was because if Makate should lose the judicial review, "Vodacom will have a massive costs order against him".
But Makate has hit back, saying Raining Men Trade is in fact "running away from arbitration".
The arbitration concerns a dispute between Makate and his former funders in which he claims an agreement that Raining Men Trade will receive a share of the settlement was cancelled after the Please Call Me court case initially failed in the high court. Later, Raining Men Trade sought arbitration, claiming that the agreement held.
A now defunct company Blackrock bankrolled Makate, but a new company Raining Men, which included Schoeman, was set up and took over the Makate case.
Makate claims his signature was forged in a new agreement document that was drafted without his consent and which says the contract cannot be annulled.
"I am sitting with a fake agreement that is on the [National Prosecuting Authority] desk," Makate told Business Times on Wednesday.
Schoeman has also claimed that Makate is pushing for a higher settlement from Vodacom because he has already spent the money he anticipated receiving from it. "He got money from people and bought houses and cars and sold some of his shareholding to various people," Schoeman said.
Makate said: "I work for a living and the comments about my finances and about me being bankrupt are baseless."