It is now official. Telekom Networks Malawi (TNM) has finally withdrawn its K90 million flagship Super League sponsorship following Competition and Fair Trade Commission (CFTC) ruling that the mobile and data services provider’s contract with Super League of Malawi (Sulom) has unfair trade practice clauses.
The development comes two weeks after TNM first suspended the procurement of 2017 Super League materials and contract renewal negotiations pending discussions with CFTC, Sulom and Football Association of Malawi (FAM).
But a statement issued last evening and signed by the company’s chief executive officer Douglas Stevenson says it has decided to pullout since CTFC has maintained its ruling.
He said: “Following the meeting on Monday, March 20th, where Sulom and FAM was to get clarity on the ruling by CFTC on the future of the contract with TNM, CFTC has broadly maintained its ruling and therefore, TNM has made the decision to fully withdraw from the sponsorship of Super League and let other potential sponsors take part in the continued development of the sport in Malawi.
“TNM acknowledges and abides by the determination made by CTFC and would not want to be found to be acting in a manner that has ‘negative effects on the development of football in Malawi as stated on page 20 of the [CFTC] report.”
In the statement, TNM has also stressed the importance of exclusivity in commercial sponsorship.
“As a business, TNM distinguishes between corporate social responsibility [CSR] and commercial sponsorship. In a sponsorship as per normal global practice, exclusivity is a critical factor in the creation of commercial value for any sponsors. To this end, TNM has invested the equivalent of K2.6 billion towards the Super League in the past 10 years in both the sponsorship money and other investments in the league. Sulom is, therefore, at liberty to now engage with any willing sponsors who have interest in football,” reads the statement.
Sulom general secretary Williams Banda said TNM needs to give 30 days notice before pulling out since they have a running contract.
He said: “TNM and Sulom signed a five-season contract which ends after the 2017 season. This means the contract is still running and if they want to pull out, there are legal implications. I have not seen the letter from TNM, but I will find out if they have terminated the contract or if they have just pulled out from the contract renewal negotiations because they still have a season left in the contract.”
FAM general secretary Alfred Gunda said he would comment after getting the letter from TNM.
But clause 17.1.6 of the agreement says TNM can terminate the contract where any adverse circumstance has occurred which, in the opinion of TNM, will materially and adversely affect the ability of Sulom to perform their obligation under the agreement.
“Then and in any such case TNM shall, without prejudice to any other rights or remedies TNM has under this agreement or at law, reserves the right to terminate this agreement by giving notice of termination of the agreement of not less than 30 days,” reads the termination clause 17.0 of the contract. n