Vodacom shareholders decided to take no action against former CEO Alan Knott-Craig following a forensic report into nepotism allegations, the cellphone group said on Sunday.

An “independent report” was commissioned by Vodacom’s then shareholders, Telkom and Vodafone, in 2008 to investigate accusations made by “several former employees”, company spokesman Richard Boorman says.

The Sunday Times reported at the weekend that a KPMG forensic audit report was compiled after two former Vodacom employees made accusations that Knott-Craig (pictured) allegedly exploited company resources for the benefit of family members.

According to Boorman: “All 18 allegations were examined closely and two were deemed worthy of more detailed review. Through this independent process, both of these cases were reviewed to the satisfaction of Vodacom’s shareholders and in neither case was it deemed necessary to take any action against any individuals.”

The Sunday Times reported that the former Vodacom board commissioned the report in August 2008 after Telkom and Vodafone were handed a dossier of allegations against Knott-Craig, apparently made by two employees.

According to the newspaper, the allegations claim Knott-Craig helped his son with business ventures using Vodacom resources. He also allegedly awarded a multimillion-rand contract to a marketing and advertising company run by family members.

The Sunday Times reported a claim was made that Knott-Craig allegedly arranged for Vodacom to train an employee in the US to become a magician.

“Though the cost of the training was not disclosed, the network operator spent US$7 141 for ‘magician’s props’.”

Knott-Craig’s son, Alan Knott-Craig Jr, told the Sunday Times his father was “completely exonerate[d]” by the KPMG report. “Two disgruntled former employees made several allegations against my father over a year ago. The Vodacom board decided to institute an investigation to either confirm the charges or clear my father’s name. Upon studying the KPMG report the board decided to completely exonerate my father.”

Knott-Craig Jr also showed the newspaper an e-mail, apparently from former Vodacom chairman Oyama Mabandla dated 3 December 2008 which read: “The board has looked into the KPMG report. We have decided to close the matter.”

Vodacom was subpoenad last week to present the report to the Labour Court in connection with a dispute apparently involving one of the former employees who made the allegations against Knott-Craig.

Boorman told the newspaper the report was in the hands of shareholders and not Vodacom management.

Vodacom’s current chairman Peter Moyo told the Sunday Times KPMG had “made it clear that the report should not be used for anything other than what it was commissioned for”.

Under JSE listing rules, the company would have been required to disclose any corporate governance violation risk when listing.

On Sunday, Boorman said all recommendations contained in the report were implemented well in advance of Vodacom’s listing as a public company.

“Vodacom’s board acted quickly and decisively … correct procedures were followed, and … Vodacom’s shareholders were kept fully apprised of all developments in relation to these allegations.”

Boorman said all corporate governance issues were taken “extremely seriously” at Vodacom. “We regularly review our policies and procedures to ensure adherence to the highest standards of business integrity, ethical values and professionalism.” — Sapa