NetOne spends $6 mil­lion to gen­er­ate $51 000 in dodgy OneWal­let deal

Chronicle (Zimbabwe) - - Front Page - Lloyd Gumbo

SUS­PENDED NetOne man­age­ment led by chief ex­ec­u­tive of­fi­cer, Mr Re­ward Kan­gai, al­legedly paid a for­eign firm Ge­malto about $6 mil­lion in ad­vance for the One Wal­let Sys­tem that gen­er­ated a pal­try $51 000 since its in­tro­duc­tion.

The com­pany also awarded ten­ders run­ning into mil­lions of dol­lars to some com­pa­nies with­out go­ing through the State Pro­cure­ment Board as pro­vided for by the law.

These rev­e­la­tions are con­tained in the fi­nal foren­sic au­dit in­sti­gated by the Au­di­tor-Gen­eral’s Of­fice.

While our Harare Bureau could not ob­tain a copy of the fi­nal re­port, in­sid­ers said the au­di­tors, Price Water­house Coop­ers, con­firmed a num­ber of ir­reg­u­lar­i­ties that re­sulted in the au­dit be­ing car­ried out.

“Among the findings were the fact that Ge­malto was paid nearly $6 mil­lion for the sup­ply of the One Wal­let Mo­bile Money Plat­form yet dur­ing its en­tire ex­is­tence, the sys­tem only gen­er­ated $51 000 for NetOne,” said the source.

“An­other Soft­ware sup­plier Con­ver­gys was paid over $10 mil­lion for six con­tracts of which only two had State Pro­cure­ment Board ap­proval. Of that money $1 mil­lion was paid in ad­vance with­out an ap­proved in­voice or con­tract.

“The other findings were that a fuel sup­plier Redan was paid over $5, 7 mil­lion in fuel sup­plies with­out go­ing to ten­der.”

Mean­while, the NetOne board has started the process of fir­ing Mr Kan­gai and the rest of the man­age­ment who were part of an al­leged cor­po­rate malfea­sance at the paras­tatal as de­tected by the au­di­tors. Sources told our Harare Bureau that the board met on Septem­ber 9, 2016 af­ter re­ceiv­ing the au­dit re­port and re­solved to fire Mr Kan­gai and the rest of the sus­pended man­agers. To that end, NetOne board chair­per­son, Mr Alex Marufu, on Mon­day wrote to Mr Kan­gai re­quest­ing that he re­sponds to the is­sues that were raised in the foren­sic au­dit re­port that they also served him. “The au­dit re­port by Price Water­house Coop­ers is now out,” reads a let­ter by Mr Marufu that our Harare Bureau had a glimpse of. “I en­close here­with a copy of the re­port. The board hereby in­structs and di­rects you; to pe­ruse, study and an­a­lyse the re­port. To pro­vide writ­ten re­sponses, replies and com­ments on each and ev­ery al­le­ga­tion of; “Breach of stand­ing com­pany pro­ce­dures by man­age­ment, breach of sound cor­po­rate gov­er­nance prin­ci­ples by man­age­ment, con­flict of in­ter­est in some of the transactions between the com­pany and em­ploy­ees.

“The fail­ure of duty of care and pru­dence in com­pany ex­pen­di­ture by man­age­ment in ac­qui­si­tion and or ser­vice pro­vi­sion agree­ment, fail­ure by man­age­ment to adopt, fol­low or com­ply with best prac­tice guides in terms of the Na­tional Code on Cor­po­rate Gov­er­nance and Cor­po­rate Gov­er­nance Frame­work for State En­ter­prises and Paras­tatals and any other mat­ter or is­sue raised in the au­dit re­port whose ef­fect is to cast im­pro­pri­ety on the con­duct of man­age­ment and your­self as chief ex­ec­u­tive of­fi­cer.”

Mr Marufu gave Mr Kan­gai three work­ing days to re­spond, fail­ure of which (to com­ment or re­spond to ad­verse au­dit findings on any of the is­sues raised) could be in­ter­preted as in­dif­fer­ence to the au­dit ex­er­cise or ad­mis­sion of the findings.

“What the board has asked is for him to re­spond to a series of cor­po­rate malfea­sance, cor­rup­tion and un­der­hand deal­ings, which form the findings of the foren­sic au­dit that was done by Price Water­house Coop­ers un­der the aus­pices of the Au­di­torGen­eral’s Of­fice.

“Some of the ir­reg­u­lar­i­ties iden­ti­fied is con­flict of in­ter­est on Mr Kan­gai and some of his man­agers who ob­tained loans from NetOne to buy shares into a NetOne ser­vice provider known as Firs­tel. When it ran into fi­nan­cial losses and raked a bill with NetOne of more than $11 mil­lion, Mr Kan­gai on be­half of both NetOne and Firs­tel ap­proached the NetOne board with a pro­posal that the en­tire Firs­tel debt be writ­ten off,” said a source.

An­other source said the au­di­tor also picked that mil­lions of dol­lars were al­legedly lost through ma­nip­u­la­tion of air­time recharge vouchers with ac­count­ing sys­tems for air­time stocks open to ma­nip­u­la­tion.

“They also said there were ir­reg­u­lar­i­ties in the ac­qui­si­tion of base sta­tions as Mr Kan­gai uni­lat­er­ally di­rected their in­stal­la­tion at prop­er­ties where he had in­ter­ests.”

Mr Re­ward Kan­gai

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