Web of plots: Inside NetOne’s boardroom wars

Information, Communication and Technology minister Supa Mandiwanzira took an active role in the appointment of key NetOne executives and pushing out the mobile operator’s chief executive officer Reward Kangai, fresh evidence has revealed.

BY STAFF REPORTER

The plot to oust Kangai started months before the government-owned mobile operator embarked on a forensic audit which was eventually used to carry out a major management shake-up that cost the NetOne boss his job mid-year.

Documents gleaned by The Standard revealed that as early as October 2015, then NetOne chairperson, Alex Marufu was threatening to kick out Kangai for various alleged misdemeanours and Mandiwanzira’s name featured in most of the plots.

The documents also show that Kangai was at loggerheads with Mandiwanzira for allegedly refusing or delaying to pay a Chinese consulting firm — Megawatt Energy — over $4 million as consultancy fees for allegedly probing the price of a project that was awarded to Huawei Technologies for NetOne’s expansion drive.

NetOne sent Kangai, together with other executive members, on forced leave mid last year in order to carry out a forensic audit after the chief finance officer Sibusisiwe Ndlovu suspected anomalies in some tenders and projects.

The ex-CEO was subsequently fired after the forensic audit fingered him in a number of alleged financial irregularities — charges he has denied.

The documents also state that Kangai was against the appointment of Ndlovu as the chief finance officer.

According to the new evidence, in September 2015 Marufu wrote a letter to Kangai threatening to dismiss him if he did not issue out letters of appointment to people who were preferred for key positions at NetOne, among them Ndlovu.

According to minutes of a meeting held on October 30 2015, Mandiwanzira threatened to kick Kangai out if he did not pay Megawatt Energy $4 million consultancy fees.

“The minister intimated that this was confidential [payment of $4 million to Megawatt Energy] and would not want this matter to spill into the press as it would spoil the major contracts that were anticipated to be signed during the impending visit of the Chinese president Xi Jinping in December [2015],” minutes of one of the board meetings at the height of problems read.

“The minister went on to issue threats that should the issue come out in the public arena, the CEO and chief technical officer would have to resign as they presided over the overpricing of the project,” the minutes added.

As if that was not enough, on February 11 2016, Mandiwanzira held another meeting with management where he allegedly told Kangai to leave management of the group to Brian Mutandiro, who had just joined the group as chief operations officer.

“On item 1, the minister reiterated the amounts which were due and payable to Megawatt Energy by NetOne.

“On agenda two, the minister said the CEO must leave operations of the company to the newly-appointed chief operations officer,” the minutes read.

“The minister raised the issue about a vehicle that had been issued to his office in June 2015, the minister said he had received reports that NetOne management had complained that the minister was abusing NetOne facilities.

“He went on to say that he has a prerogative to order the board to fire the CEO.”

The documents suggested that sensing bad blood between the minister and Kangai, Marufu persuaded the CEO to consider early retirement months before the audit, which eventually caused his ouster.

“The honourable minister has requested an urgent report on the status regarding appointments, can you please draft a letter for me explaining full status.

“The minister would like to know why CFO [chief finance officer] has not been appointed,” read an email from Marufu to Kangai on February 15 2016.

“On a separate note, you indicated a willingness to take an early retirement package after our last board meeting and I believe you repeated the same to the deputy chair [Sydney Nyanungo].

“Have you given thought to what kind of package you would be prepared to look at? I would like to keep this last point private and we keep the discussion between us for the time being,” Marufu wrote to Kangai.

But in his response on the same day, Kangai denied that he wanted to quit, saying if it was the intention of the board and its shareholders, government that he quits, he was prepared to go.

“I would not want to overstay my welcome at NetOne. If that is your intention to have me exit NetOne, then I am willing to sit down and talk,” Kangai wrote back to Marufu on the same day.

After the audit report, the board sitting on September 9, according to minutes, absolved Kangai of any wrong doing and tasked Marufu to negotiate his exit package.

Minutes of the meeting suggest that the board was unsure if there was a case against Kangai, although Marufu had indicated that “there seemed to be some evidence against him, but enquired whether there was a case against the rest of the executive on forced leave”.

According to minutes, the decision to exonerate Kangai and others was arrived at after some board members said the forensic audit lacked clarity on how the ex-chief executive officer benefitted from the alleged looting and abuse of office at NetOne.

“Mr G. Madzorera enquired if the executive on suspension were challenging the suspension.

“He stated that the auditors should have looked at each person’s case independently from the other, eg, did the CEO benefit individually?” the minutes stated.

In his response, according to the board minutes, Marufu stated that: “PWC [Price Waterhouse and Coopers] had indicated that there are things that were done which did not look right, but there was no proof of these people [executives] benefitting,” read part of the report.

“Having deliberated extensively on the forensic audit, the board resolved that: the board chairman, Mr Alex Marufu, the chairperson of the HR [Human resources] Cde Sydney Nyanungo and board member Nancy Samuriwo are hereby mandated to engage the chief executive officer Mr. Reward Kangai to discuss the issues arising from the forensic audit report.

“In the event that the discussions above result in Mr Kangai electing to voluntarily terminate his contract of employment with NetOne Cellular in accordance with the relevant provisions of the Labour Act, the above board representatives are empowered to act on behalf of the board with assistance of external legal counsel to implement this resolution and any matters incidental to or arising from the resolution,” the minutes read.

In his defence, Mandiwanzira said: “I am not stupid to be doing some of these things without the approval of my principal, we need to talk and I show you all the necessary documents.

“There are people who have been looting and are worried that we have closed all the taps”.

In an affidavit deposed with the High Court, challenging Kangai’s application to be reinstated, Marufu said: “If anything, the applicant himself is exhibiting an inclination to cling onto clear falsehoods against hard facts.”

Commenting on Kangai’s claims of serving his former employer and doing well for the parastatal which he was accusing of refusing to engage him, Marufu said: “Indeed, it is admitted that the applicant [Kangai] has worked for 35 years for the former Posts and Telecommunications Corporation and respondent [NetOne].

“The applicant obviously worked well for the organisation, but he must admit two key things: Firstly, that respondent has not made profits at all notwithstanding being the first registered mobile phone service provider, and that regardless of the losses, he has been earning more than most Heads of States of third world countries and has personally built his estate successfully.”

Mandiwanzira is in the eye of a storm following the recent appointment of Metbank board members Ozias Bvute and Peter Chingoka to head the Postal and Telecommunications Regulatory Authority [Potraz] and NetOne respectively.

Chingoka last week replaced NetOne board chairperson, Alex Marufu, albeit in an acting capacity.
Marufu, who was at the helm of the troubled government-owned mobile phone operator for two and half years, threw in the towel recently.

NetOne insiders accuse the minister of appointing his alleged associates into strategic positions at NetOne and Potraz for personal gain. Ndlovu is also a former MetBank executive. – The Standard

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