Reward Kangai, the chief executive officer of Zimbabwe’s second largest mobile operator, NetOne, has been suspended for three months as the operator prepares for a forensic audit to investigate corruption allegations.
This comes after information on procurement improprieties was presented to the NetOne board by its chief finance officer, Sibusisiwe Ndlovu. Allegations of corruption at NetOne first emerged a month ago and at the time, efforts to get a comment from management weren’t successful.
Now, according to the Herald, the suspension was confirmed by Alex Marufu, the NetOne board Chairman. Brian Mutandiro the operator’s new chief operating officer will be the acting CEO in Kangai’s absence.
A lot of the allegations relate to improper procedures for the payment of suppliers which were characterised by advanced payments for services that were sometimes not delivered, weak accountability and a failure to enforce procedures on transactions.
Some of the cases that have been reported as having raised concerns with the NetOne CFO include;
- uncleared bank reconciliations dating back to 2013 which exposed NetOne to the risk of duplicate payments;
- 6-year prepayments for cellphone tower rentals;
- a poorly negotiated contract with Gemalto, the provider of NetOne’s OneWallet mobile money service, which earned support fees and payment on all registered OneWallet users, whether they were active or not;
- payments made to Bopela, the provider of cell phone towers that received money for work despite not having a contract with NetOne.
While the NetOne board awaits the results of the forensic audit that will determine the extent of corporate impropriety, the details so far suggest that one of the reasons why NetOne has been hamstrung has been the serious internal challenges.
Despite a growing subscriber base, NetOne has struggled to make a profit as the telecoms environment becomes a lot more aggressive.
In recent months, the State-owned operator has been focused on turning a profit following a $5,8 million loss recorded in the first half of 2015. Ambitious targets set by Kangai for the current financial year include $150 million revenue and a consistent subscriber growth.
Part of this vision for continued network growth has been anchored in NetOne’s LTE rollout project which was financed by a $218 million loan from the government. In January this year, Kangai mentioned that they would require another $600 million to complete its network expansion.
The Minister of ICT, Supa Mandiwanzira, vowed to shake up NetOne last year, a pledge that was fulfilled by a change in management and the creation of the new role of chief operations officer.
These changes are hopefully going to turn things around at the operator and help in clearing any corruption that could be affecting its performance.