NetOne scam gets nastier. . . base station towers sited at relatives’ homes

Source: NetOne scam gets nastier. . . base station towers sited at relatives’ homes | The Herald December 23, 2016

Takunda Maodza Assistant News Editor
FIRED NetOne boss Mr Reward Kangai reportedly caused the installation of base station towers at relatives’ homes for them to enjoy lucrative rentals from the parastatal. In some instances the beneficiaries are said to have received huge payments in advance, it has emerged.

A forensic report released recently indicates that one of the beneficiaries is Mr Kangai’s aunt, Ms Joyce Kangai of Goodhope, Harare.

NetOne has a standard template for lease agreements with landlords on whose properties it builds base station towers.

“We noted a memorandum dated March 3, 2014 in which Mr Wenga (a NetOne employee) was requesting Mr Kangai to approve the acquisition of a base station site for Stand 103 Goodhope, Harare. Mr Kangai referred the approval to other NetOne directors citing that Ms Kangai was his aunt and thus he was unable to approve the acquisition. NetOne, represented by Mr Tarupuwa, entered a lease agreement on March 20, 2014 with Ms Kangai noted as the lessor on the agreement,” states the forensic report.

The tenure of the agreement is 10 years.

“Total rentals throughout the lease were calculated to be $60 000. As of December 2015, Ms Joyce Kangai had been paid $12 000. From our review of the NetOne board minutes for the period January 1, 2009 to December 31, 2015, there is no evidence that Mr Kangai declared his relationship with Ms Kangai to the board. It would have been appropriate for Mr Kangai to refer the approval of the lease agreement to the board rather than have his subordinate authorise the transaction,” the auditors said.

In some instances NetOne reportedly paid landlords on whose properties it installed base stations rentals in advance.

An example is when one of the landlords, only identified as Ms Marongwe, wrote a letter to NetOne requesting a rental pre-payment of two years. The request was granted.

“According to the letter, there were urgent family matters that needed immediate attention. NetOne made a payment of $16 500 to Ms Marongwe on September 22, 2015. Out of this amount, $6 000 was for rental up to September 2015. The remaining $10 500 was a prepayment for the 21 month period from October 1, 2015 to June 30, 2017,” it stated.

Mr Kangai approved the transaction.

In a similar fashion, Mr Kangai approved an advance payment of $27 000 on April 30, 2013 to Pastor Eugene Nyathi of the Avondale Christian Church.

This was despite the fact that the lease agreement had no provisions for prepayments.

Richwood Park Paraplegic Club was also paid $12 000 of which $9 600 was prepayment beyond the 12 months stipulated in the lease agreement. Several other landlords were also paid the same way.

The report further notes that NetOne engaged two companies, Telsite Investments (Pvt) Ltd and Tower Resources (Pvt) Ltd, to secure base station sites on its behalf. Telsite was engaged to secure sites in Harare while Towers Resources secured in several towns and cities around the country.

“In the period under review, NetOne had no policy or procedure in place for the engagement of such third parties,” further reads the audit report.

The two companies were also engaged without following procedures and paid thousands of dollars.

NetOne also installed base station towers in Harare without approval of council, earning the parastatal close to $100 000 in regularisation fines.

Had NetOne followed due process the costs would have been minimal.

“NetOne would begin construction of a base station tower within Harare without having obtained approval from City of Harare. The City of Harare would then request NetOne to pay a regularisation fee which was pegged at $1 050 per site. We requested for a list of sites where a regularisation fee was paid during the period January 2009 to December 31, 2015,” reads the audit report.

NetOne furnished the auditors with 80 sites “and RTGS transfer instruction from NetOne to the City Of Harare amounting to $75 600 and retained $8 400 as withholding tax”.

Says the audit report: “The payment details stated that the funds were regularisation fees. Mr Boker Masasi (land management manager at City of Harare) said had NetOne obtained proper authorisation from City of Harare before construction, a fee of $230 per site would have been paid compared to a $1 050 regularisation fee. As a result of not following the City of Harare authorisation procedures, NetOne paid $65 600 as penalty fees.

‘At the time of reporting, Mr Masasi was yet to confirm whether these were the only sites for which NetOne paid regularisation fees during the period January 1, 2009 and 31 December 2015.”

The Kangai administration has since been fired. Mr Kangai is, however, challenging his dismissal at the High Court where he is seeking an order to compel his former employer to institute a disciplinary hearing against him.