Neotel CEO Sunil Joshi and chief financial officer Steven Whiley have been placed on “special leave” pending an investigation into alleged bribery and corruption at the telecommunications operator.
The company on Friday became caught up in a potential bribery scandal that, it’s been speculated, could even derail Vodacom’s R7bn bid to buy the company.
“In the course of Neotel’s most recent audit, certain alleged irregularities were raised by Neotel’s external auditors. On learning of the irregularities, the Neotel board took immediate action, mandating an independent investigation,” the company said on Friday in response to questions from TechCentral.
“The investigation concluded that the irregularities indicated a possible noncompliance with the company’s internal procurement and payment processes. Neotel is committed to the highest standards of corporate governance, and will not tolerate any deviation from these standards,” it said.
“As such, the board has further appointed a subcommittee to continue an investigation into the noncompliance, and, importantly, to ensure the strengthening of the company’s policies, procedures, internal controls and governance. The CEO and CFO have taken special leave in co-operation with this investigation.”
According to a report in the Mail & Guardian on Friday, Neotel may have made dodgy payments to a company called Homix in order to secure a telecoms contract worth R1,8bn from state-owned Transnet. It was not able to establish who is behind Homix. The Homix website – www.homix.co.za — is registered to a Yakub Bhiku of Mayfair West in Johannesburg, website registration records show.
Quoting correspondence from Neotel’s auditors, Deloitte, which the M&G said it has seen, Neotel paid a 2% “success fee” to Homix of R36m to secure the Transnet deal. In addition, Homix was promised a further R25m to secure the related sale of Neotel assets to Transnet, though this money hasn’t been paid, the newspaper said.
The report has raised questions about the role of Transnet finance chief Anoj Singh as well as Neotel’s Joshi in ensuring the payments to Homix. Joshi allegedly ordered his staff to pay the R36m to Homix after meeting with Singh and securing payment from Transnet to Neotel. The M&G said Transnet has denied that Singh was party to any discussions about a payment to Homix.
Vodacom spokesman Richard Boorman declined to comment on what impact the developing scandal could have on its chances of buying Neotel. The M&G has speculated that a corruption probe could force Vodacom parent Vodafone to reconsider its options.
“This is a matter for Neotel, its board and shareholders. We are monitoring developments and at this stage have nothing to add to the statements made by the relevant parties,” Boorman said. – © 2015 NewsCentral Media
