Please Call Me's Makate goes to war with former funders over Vodacom payout share

Key topics:Makate sues to block Black Rock/Elsdon claim to 40% Vodacom settlementFive-pronged case: fraud, breach, cancellation & prescription argumentsLong-running Please Call Me funding dispute heads back to High Court.Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox every morning on weekdays. Register here.Support South Africa's bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up to the BizNews channel here..By Jan Vermeulen.Please Call Me idea-man Nkosana Kenneth Makate launched legal action aimed at defeating the claims of Black Rock Mining and former backer Errol Elsdon to 40% of his settlement with Vodacom.This followed Black Rock’s conditional agreement in March 2026 to stay arbitration, provided Makate instituted the Commercial Court action within an agreed timeframe.Makate has now returned to the High Court, launching a five-pronged assault on Elsdon’s claim that he is owed a portion of the settlement.Makate pleaded his case on five alternative bases: alleged fraud, alleged abuse of juristic personality, agreed cancellation, breach and repudiation, and prescription.Several of these arguments themselves contain alternatives for the court to consider, resulting in a somewhat legally technical case.Makate’s main claim was that misrepresentations induced the 7 November 2011 funding agreement and subsequent nomination of Black Rock..Read more:.Vodacom scores major win as ConCourt sends ‘Please Call Me’ case back to SCA.He alleged that the late Christiaan Schoeman, Elsdon, and another personal friend and business associate of theirs represented that Black Rock could fund the Please Call Me litigation.That included claiming that Black Rock had the financial means, legal standing, and administrative capacity to meet its obligations.These obligations included funding legal costs, depositing funds with his attorneys when required, and indemnifying him against adverse cost orders.Makate alleged these representations were false, saying Black Rock was not in the business of litigation funding and lacked the means to perform.He further alleged that Black Rock never had assets, never traded, failed to submit annual returns in the British Virgin Islands, and failed to keep proper accounts.Makate claimed that, had these alleged facts been disclosed, he would not have signed the funding agreement or accepted Black Rock’s nomination.He also seeks to have the arbitration clause declared void, arguing that it formed part of the same allegedly tainted agreement.Black Rock and Elsdon previously argued that they had funded Makate’s initial litigation against Vodacom and remained entitled to 40% of his settlement proceeds, per the original agreement.Makate disputed this and alleged that, even if the court did not find in favour of his fraud allegations, Black Rock failed to perform its obligations under the agreement.In the papers, Makate said Black Rock failed to fund the litigation, failed to indemnify him against several adverse cost orders, and failed to pay a R4-million advance after his 2016 Constitutional Court win.Five-pronged attack.Makate’s first claim asked the court to declare the funding agreement and nomination agreement void ab initio, meaning void from the outset, due to the alleged fraud.His second claim relies on section 20(9) of the Companies Act, which allows a court to disregard a company’s separate legal personality in certain circumstances.Makate alleged that Elsdon used Black Rock as his alter ego and that its juristic personality was abused in relation to the disputed agreements.He asked the court to deem Black Rock not to have been a juristic person for purposes of the funding agreement, nomination agreement, and arbitration clause.His third claim was that the funding and nomination agreements were cancelled by agreement on 7 January 2015, alternatively 12 January 2015.Makate pleaded that Schoeman accepted the cancellation after earlier demands were made regarding alleged non-performance under the funding arrangement.His fourth claim, pleaded in the alternative to the third, was that Black Rock breached or repudiated the agreements by failing to provide funding and indemnity.Makate’s fifth claim, pleaded in the alternative to the fourth, was that Black Rock’s alleged right to claim 40% of the Vodacom settlement has prescribed.Prescription is the legal principle governing the expiration of debts. Makate provided the court with several alternative dates and arguments for when the debt would have prescribed..Read more:.Vodacom enters private talks with former employee over ‘please call me’ compensation dispute.His prescription argument referred to the R47-million award made by Vodacom’s CEO, Shameel Joosub, on 18 January 2019 after the Constitutional Court’s 2016 ruling.Long-running dispute.The dispute between Makate and Elsdon centres on a funding agreement Makate signed on 7 November 2011 with Schoeman.This was to finance Makate’s battle against Vodacom over compensation for his “Buzzing Option” idea, which he proposed in a memorandum dated 21 November 2000, while working at the mobile operator.Vodacom said in an internal newsletter that it had developed Makate’s idea into Please Call Me, allowing users without airtime to request a callback from another subscriber.MTN launched a similar service, Call Me, using a patented system invented by Ari Kahn, on 23 January 2001. Vodacom’s service, also initially named Call Me, launched seven weeks later.Makate ultimately settled his case against Vodacom in November 2025, ending 17 years of litigation over the Please Call Me service.The settlement amount was not disclosed, but Vodacom’s market announcements pointed to a one-off earnings impact of between R353 million and R748 million.Black Rock moved quickly after the settlement, filing an urgent Johannesburg High Court application in November 2025 to freeze part of the funds.That application was dismissed with costs on 9 December 2025, with Judge Don Mahon finding that Black Rock had not proved Makate intended to dissipate the money.Black Rock then pushed ahead with arbitration through the Pretoria Society of Advocates, which appointed Adv Greta Engelbrecht as arbitrator on 10 February 2026.Makate refused to participate, arguing that the arbitration clause itself was tainted by the alleged fraud underlying the entire funding agreement.He filed an application on 25 February 2026 to suspend the arbitration and have the validity of the agreement decided by a court.Black Rock’s attorneys later indicated that it would agree to stay the arbitration, subject to conditions including that Makate instituted legal action that would be designated a commercial case..Read more:.Vodacom’s R36bn bet: Joosub secures control of Safaricom and its M-Pesa jewel .Wilna Lubbe of Stemela & Lubbe previously told MyBroadband that Makate had consistently maintained that the matter should be adjudicated by a court.MyBroadband contacted Lubbe, Makate, and Elsdon for comment, but they did not provide feedback by publication..This article was first published by MyBroadband and is republished with permission.

Please Call Me's Makate goes to war with former funders over Vodacom payout share

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