Neotel director and shareholder Kennedy Memani will provide “interim executive oversight as the director in charge” following the decision last week to place CEO Sunil Joshi and chief financial officer Steven Whiley on “special leave” pending an investigation into alleged bribery and corruption.
TechCentral reported on Friday that Joshi and Whiley had been placed on special leave after Neotel had become caught up in a potential bribery scandal involving what may have been corrupt payments to a third party to secure a multibillion-rand contract at Transnet.
“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 after the Mail & Guardian newspaper reported details of irregular payments in a front-page story.
“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,” the company said.
According to the M&G report, Neotel may have made dodgy payments to a company called Homix in order to secure a telecoms contract worth R1,8bn from Transnet.
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 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. – © 2015 NewsCentral Media