Government lawyer SA Celliers said on Sunday that the Zuma administration stood by what had been agreed with Vodafone, and said Cosatu’s attempt to scupper the deal was going nowhere.

“The prima facie case is not there to stop the listing,” Celliers told the court. “There isn’t a case to start with.”

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 19:00 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.

It could also hit the rand, since British mobile phone giant Vodafone has already brought R20.5bn into South Africa to buy a 15% stake in Vodacom, and would be forced to repatriate the cash if the deal hit the buffers, Vodacom’s lawyer told the court.

The listing of Vodacom, which some analysts have valued at more than R70bn, is the final part of a plan by fixed-line operator Telkom to get rid of its 50% stake in the country’s biggest mobile operator.

Under the plan, Vodafone agreed to buy the 15% stake from Telkom, giving it a controlling 65% holding. Telkom will then distribute its remaining 35% 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% 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.

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.

Vodacom vowed to fight the injunction bid and Johannesburg Stock Exchange (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 said.

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?’”