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

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

by reporter263

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 Auditor-General’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.”-Chronicle

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