Entreprenuer wrestles with Econet

Ignatius Munengwa (Image source: Twitter)
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HARARE- A businessman based in Harare, innovator, and entrepreneur Ignatius Munengwa has reported the Postal and Telecommunications Regulatory Authority of Zimbabwe (Potraz) top executives to the regulator’s chairperson for throwing out his complaint in which the innovator accused telecommunications giant Econet of stealing an idea he had presented to the company for a partnership.

In a letter to Potraz board chairperson Doreen Sibanda dated 9 November 2021, which was also copied to the permanent secretary in the Ministry of Information Communication Technology Sam Kundishora, Zimbabwe Anti-Corruption Commission (Zacc) chairperson Loice Matanda Moyo and chief secretary in the Office of the President Misheck Sibanda, Munegwa accused Potraz executives, including director-general Gift Machengete, of unprocedural throwing out the case.

“Our formally registered complaint against Econet is being forcefully closed by the Potraz executives when our complaint has not been fully addressed. There are matters that need urgent clarification and resolution by Potraz. We seek your urgent intervention to resolve this matter,” Munengwa said.

He accused Econet of influencing Potraz to throw out the case. “There are too many instances where it appears to us that Econet’s tacit influence appears to have negatively affected our pursuit for justice and even Potraz’s ability to adjudicate our complaint.

This behaviour by Econet, if left unchecked, can become a national security issue. Potraz must be able to hold one of their members accountable to fair and honest business practices,” he added.

Potraz says it has no jurisdiction to deal with the matter.

“Given all this correspondence and the fact that we have advised you of what steps you need to take to resolve the matter, it is now appropriate to close our file on the matter. We, therefore, advise that it is no longer necessary for you and us to continue exchanging correspondence over the matter. We will therefore not respond any further, to any request from you for us to assume the role of the courts and deal with the matter,” Machengete wrote in a letter dated 27 October.

In an earlier letter dated 20 August, Machengete said the regulator was throwing out the case on the basis that it was an intellectual property matter.

“Having considered the details of your complaint and representations made by Econet Wireless (Pvt) Ltd, attached hereto for ease of reference, we advise that the case is beyond our jurisdiction in view of the nature of the complaint, which is more of an intellectual property issue and not an anti-competition issue,” Machengete said.

In an interview with The NewsHawks, Munengwa said he is advocating for other tech entrepreneurs who may have lost intellectual property to the telecommunications giant.

“I think I am now advocating for a matter beyond my case which is the accountability of power. When someone as powerful as Econet messes up it is important for them to mess up. But when institutions like Potraz, which is the regulator, are now failing to hold their own to the point where they are retracting information from Econet with no explanation, that is not normal. It speaks of a compromised regulator,” Munengwa told The NewsHawks.

“I am not going to be silenced by him (Machengete). To just take the letter back and not give reasons, close the file, it is not procedural.”

Before Potraz threw out Munengwa’s complaint, the regulator had promised to look into the issue.

“We have noted the contents of the letter, and wish to advise that we are engaging Econet to get their side of the story before we can make a determination on the same. We shall be constantly engaging you on the matter with the hope of coming up with a solution to the complaint you raised,” Potraz wrote to Munengwa in a letter dated 2 July.

Before approaching Potraz, Munengwa had sought legal recourse at the High Court before withdrawing, citing conflict of interest regarding lawyer Phillipa Philips.

Munengwa believes Phillips undermined his case, resulting in him withdrawing the matter from the High Court last year after Justice Felistas Chatukuta sought comments on an alteration to summons she had made on his behalf.

He told The NewsHawks that when it became clear his lawyer was refusing to respond within the timeframe set by the High Court, while also withdrawing her services at a critical time, he withdrew the matter from court to pursue it through Potraz.

 In an earlier meeting, Potraz officials had informed him they could not intervene as long as the matter was in court, although the authority offered a platform to resolve the issue.

“When I met with your executive team in 2018, we discussed that we could always bring our matter for resolution before you, as the regulator. However, at the time we had initiated the High Court option. Since the matter is no longer before the courts, we are again bringing the matter before your attention. We would like to report Econet for unfair business practice and seek resolution for this matter through your office as the regulator,” reads Munengwa’s letter to Potraz.

Potraz started investigating the complaint in May this year, while the Law Society of Zimbabwe has been on the matter since October last year. Phillips, who at one time served as a lawyer to former president Robert Mugabe’s son-in-law Simba Chikore, as well as a director in dodgy airline Zimbabwe Airways, is a partner at Phillips Law, a local boutique law firm specialising in immigration; citizenship, compliance and corporate law.

In 2011 M-Comm Africa, through Munengwa, approached Econet Wireless with a proposal to partner the company with the provision of panic button rapid response security services.

Munengwa said he continued engaging Econet until June 2015, when the then chief commercial and customer services officer of Econet, Stanley Henning, responded advising that the company would not pursue the idea.

In November 2015, however, Econet launched “Connected Home”, which included a Panic Button and Rapid Response Service, which Munengwa believes is a replica of his idea.

Econet confirms that Munengwa indeed approached the telecommunications company to discuss a panic button service concept or an idea that they wanted to venture into.

The telecommunications giant says M-Comm Africa was not in existence at that time, instead Munengwa represented himself as the director of Iacocca Investments. “Meetings were indeed held with Mr Munengwa in relation to his idea/concept.

There was also extensive communication and exchange of emails between the parties. At no time during these discussions was a contract, either oral or written, entered into between the parties.

The engagements were purely negotiations which never saw the light of day in terms of creating a binding legal relationship,” Econet chief operating officer Kezito Makuni wrote to Potraz on 28 July.

Econet says it had considered several ideas and, in particular, Chuango Security Technology Corporation which had developed a similar home security system.

“Being satisfied with the workings of Chuango’s home security system, we acquired non-exclusive rights to use their system and, in 2014 launched our Connected Home service which was wholly based on Chuango’s system and Chuango had developed and patented the idea long before Mr Munengwa had attempted to accost us with his idea/concept. Consequently we did not need authority or consent from Mr Munengwa to implement our Connected Home system nor were we bound to deal exclusively with Mr Munengwa,” wrote Makuni.

“Our Connected Home service is not in any way related to Mr Munengwa’s panic button idea. In any case, the concept of a panic button was, at the time, not new and novel to an extent that one could claim ownership of the same. Especially when such a claim is not even backed by registered patents and/or trademarks. Further the business model of bundling services to the telecommunication service is not new in the industry and Mr Munengwa’s claims of crediting himself with the concept are baseless,” he added.

“Econet Wireless did not and could not have possibly benefitted from Mr Munengwa’s concept or idea. It was a half measure which could have been difficult to sell to customers. Our Connected Home service is entirely based on the Chuango system, which we believe was conceived and developed by Chuango.”

Munengwa is demanding US$870 375 as damages for breach of contract and misappropriation of confidential information or alternatively an order directing that Econet pays M-Comm 40% of whatever profits have been made from the Connected Home service.

During the court process: “Munengwa abandoned the action and instituted yet another action in September 2017 seeking largely the same order although the declaration filed had been amended. This modus operandi was to continue with the complainant seemingly trying to always amend his story as and when we file opposing papers.”

“We strongly believe that, two years after abandoning the High Court process, the complainant is now seeking a different audience and hoping for better fortune in his claim. This behaviour should not be encouraged and the Authority should not allow its structures and processes to be abused in this manner,” Econet wrote.

Source – thenewshawks