NetOne corruption scandals deepen

SCANDALS at state-owned mobile phone operator continue to be unearthed as it emerged that NetOne engaged a local contractor Bopela Group to undertake a base station project without a contract amid disclosures that the contractor erected a base station at his wife’s house in the capital without the company’s approval.

By Bernard Mpofu

This is revealed in the first draft of an audit report on NetOne titled Provision of Comprehensive Forensic Investigation Services to NetOne Cellular Services compiled by Pricé WaterhouseCoopers Zimbabwe (PwC) on behalf of the Auditor-General seen by the Zimbabwe Independent.

This audit report also says that the company corruptly, with the blessing of suspended NetOne chief executive Reward Kangai, paid rental fees to Masiyakurima’s wife in advance, in clear violation of a lease agreement.

Kangai was sent on forced leave in March after the company’s board sanctioned a forensic audit into the affairs of the country’s second largest mobile phone operator.

The audit report shows that in the period under review, Bopela was contracted by NetOne to construct base station foundations and to rig towers.

It notes that there was no contract between Bopela Group and NetOne.

“We enquired with Mr Kangai on how Bopela was engaged as a service provider for NetOne and he stated the following: Bopela had previously worked with Sectional Poles as a subcontractor and Sectional Poles had been working with NetOne for some time,” the report reads in part.

“Sectional Poles which has no contract with NetOne referred Bopela to mobile phone operator. Kangai said since Bopela had already done work for NetOne, he did not see the need to have a contract with Bopela despite engaging the company.

“Mr Masiyakurima informed us that the NetOne Technical Team ensured that all orders for Bopela were always below the US$300 000 threshold so that the jobs being ordered for would not go to tender through the State Procurement Board.”

The report also notes through a review of payments made to the Bopela Group in the period under investigation that no purchase order exceeded US$300 000.

“Based on the statement from Mr Masiyakurima, it appears as if the NetOne technical team intentionally circumvented state procurement regulations,” the report reads.

The report further says that in July 2015, Bopela Group secured a US$80 000 loan from NetOne to construct base stations foundations, but the loan was repaid by a third party with no interest.

“According to the acknowledgement of debt, NetOne had engaged Bopela to construct 20 tower foundations for pine tree towers and Bopela had agreed to provide such service. Documents further state that Bopela requested a loan for US$80 000 to purchase required concrete materials from Pomona Quaries in Harare. The material was for the construction of 20 foundations,” the report reads.

“The loan amount was to be paid directly to Pomona Quaries within seven days of signing the acknowledgment debt.

Debtor was expected to be repaid within 30 days from date of payment to Pomona. The loan would attract 51% interest per annum.

“The loan was secured by a mortgage bond registered over a property owned by Agrippa Masiyakurima, Number 514 Ruwa Township of Stand 2015 Ruwa Township held by Agrippa Bopela Masiyakurima under Deed of Transfer Number 0005412/14 (This is the same site Bopela changed base stations sites without documented approval from NetOne).”

The auditors, the report further reads, obtained a Domestic/Loan Remittance Application form from Standard Chartered Bank Zimbabwe dated August 14 2015 with the loan repayment details showing that the repayment was made from Coram Mashuta’s account.

The US$80 000 was paid into NetOne account 02400973700 held with Stanbic Bank.

“There is no reference to Bopela on the remittance form. Upon enquiry, Mr C Mabambe stated that there was a possibility that Mr Masiyakurima confirmed the deposit with NetOne staff verbally. The acknowledgement of debt highlighted that the loan would attract an interest of 5% per annum (translating to US$333 per month. However, the interest of US$333 was not paid when the loan was repaid and this remains unpaid. The issue of interest was not raised in any of the documentation related to the loan that we reviewed,” the report says.

The report also states that Masiyakurima through a family trust asked his wife to seek a prepayment for rental fees from a base station constructed at her residence. This, the report shows, was in violation of the lease agreement between Bopela and NetOne.

“On September 17, Ms Abigail Marongwe wrote a letter to NetOne addressed to Mr Godfrey Tarupwa (former NetOne finance director) requesting for a rental prepayment of two years for Number 6710 Maranantha base site on behalf of the Bopela Masiyakurima Family Trust. According to a letter, there were ‘urgent family matters’ that needed immediate attention,” the report reads.

“Mr Tarupwa approved the request. Invoices attached for payment covered the period from October 1 2014 to October 1 2017. On September 22 2015, NetOne made a payment of US$16 500 from their BancABC account 10092113902017 to Ms Marongwe account number 100525223902017. This translates to a total prepayment of US$12 500 covering 25 months to October 31 2017.

“A lease agreement signed on February 9, but commercially on September 1 (backdated five months) was signed by Mr Kangai on behalf of NetOne. Ms Abigail Marongwe signed as landlord for House number 514 Chipembere Road, Windsor Park, Ruwa. Mr Masiyakurima informed us that Ms Abigail Marongwe was his wife. The agreed monthly rental was US$500.”

The report says when they asked Masiyakurima on the reason for moving the base station without approval from NetOne, he said the initial site was close to rival Econet’s tower and “this would have defeated the purpose of having environmentally-friendly pine tree tower”.

Masiyakurima, the report shows, also said there were gum trees, which needed to be cleared and Bopela Group would have borne the costs of clearing this land.