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NetOne audit raises stink

A DRAFT document of the much-awaited NetOne forensic audit report which was expected to produce fireworks has been released, but most contentious issues that prompted the investigation appear watered down or inconclusive.

A DRAFT document of the much-awaited NetOne forensic audit report which was expected to produce fireworks has been released, but most contentious issues that prompted the investigation appear watered down or inconclusive.


The draft has reportedly been handed over to the Auditor-General’s Office where some officials felt the real issues were not conclusively dealt with.

According to the report gleaned by The Standard, NetOne has a debtors’ book amounting to $54 million of which about $11,2 million was owed by Firstel Cellular, a company linked to the firm’s top management.

The report does not name the five top NetOne managers who owned Firstel Cellular and also glosses over circumstances surrounding the acquisition of shares by the executives. It also does not say why the amount owed to NetOne ballooned from $8 million to $11 million when management took over Firstel Cellular.

“The whole idea was for NetOne, management to go and protect the interests of NetOne, but that debt continued to balloon from $8 million to over $11 million,” one official told The Standard.

“The management also repeatedly tried to persuade the NetOne board to write off the debt.”

The forensic audit was done after the NetOne board said the mobile company had lost millions of dollars owing to alleged corruption, flouting of State Procurement Board tender procedures, mismanagement and poor finance control systems.

The audit centred on reviewing internal control systems, the integrity of the payment system, the accounting system, reviewing airtime distribution processes, assessment of the process of paying salaries and allowances, reviewing the process of acquiring base station sites and the engagement of third parties in site acquisition, the process of selecting suppliers as well as to review banking procedures.

The forensic report is also silent on another former service provider, Zelco Cellular which owes NetOne $15,3 million and was shut down in 2011.

However, the audit revealed an alleged tax fraud involving a company known as Bopela owned by Zanu PF activist Agrippa Masiyakurima with the connivance of suspended managers. Bopela and NetOne management amended the company’s contract to cede $2,6 million worth of work to construct base station towers to Macharawanda, a sub-contractor owned by Masiyakurima in order to avert a Zimbabwe Revenue Authority garnish order.

The report also revealed that Zimbabwe Tourism Authority boss Karikoga Kaseke owed NetOne ($10 375), Zanu PF Chegutu MP Dexter Nduna owed ($8 585) and one David Chivandire ($28 000).

It was also established that between January 2010 and December 2015, NetOne management gobbled a total of $274 418 in holiday allowances, contrary to provisions of the parastatal’s human resources policy.

On selection of supplies, the report revealed that some contractors including Sectional Poles, Bopela, Macharawanda, Afrosoft and Redan were appointed in contravention of the State Procurement Board regulations.

It also revealed that NetOne extended $80 000 to Bopela to fund the construction of a base station.

Masiyakurima also constructed base stations at his two properties and that of his brother without clear authorisation from NetOne and was later advanced two year rentals to cover a family emergency.

But officials who spoke to The Standard said transactions involving sim cards and airtime distribution were not conclusively investigated by the audit.

“The audit process did not interrogate why millions of dollars were lost on the One Wallet platform which never realised the intended benefits due to poor services,” said officials from the AG’s office.

“The system was supplied by a company called Gemalto and is reported to have at one time demanded payment of $500 000 when its service had only generated $904.”

The forensic audit did not interrogate the current NetOne billing system where leakages running into millions were being experienced as a result of shortcomings, said another source.

NetOne management was also allegedly negligent by not timeously attending to statutory obligations resulting in the company being levied fines by Zimra in excess of $5 million.

Another official said contracts signed by suspended chief executive officer Reward Kangai which resulted in the company being prejudiced of millions of dollars were also not interrogated, including one with the National Railways of Zimbabwe where NetOne owes the parastatal close to $1 million.

“The issue of several bank accounts which were being run by management without the knowledge of the finance department was also not investigated by the audit process,” said the official.