More heads roll at NetOne

Netone building

Netone building

Lloyd Gumbo Senior Reporter
Four more executives at NetOne have been sent on three-month forced leave as it emerged that the Government-owned mobile operator decommissioned new network expansion equipment worth $45 million in order to buy similar equipment using a $218 million loan facility secured from the China Exim Bank in 2014.

The $45 million is from a 2011 loan facility from the China Exim Bank as well.

The suspensions come as the parastatal continues to purge all those who are suspected to have been complicit in the illicit dealings that bled the organisation for years.

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Those axed yesterday are Mrs Memory Mandiya Ndoro (executive public relations and special projects), Mr Prosper Muvengwa (executive retail and sales), Mr Lindon Nkomo (legal executive) and Mr Rafael Mushanawani (chief information officer).

Their suspension comes hard on the heels of the suspension of chief executive Mr Reward Kangai last week.

Announcing the suspension last night NetOne board chairperson, Mr Alex Marufu said:

“Yes. Confirmed, based on additional information that has been received since the CEO was sent on leave. But, I have no further comment until the forensic audit is done,” he said.

The board revealed that some of the duplicated equipment was barely two weeks old when it was decommissioned.

Insiders said NetOne had already started replacing the equipment, some of which was installed as recently as 2015 but with no defects or reported technical challenges at all.

The $218 million facility from the same bank was signed in 2014 during President Mugabe’s state visit to China.

“The microwave link equipment that we bought from the $45 million loan is the one that put us on the map because it transformed our network by about 70 percent in terms of data capability,” said a source.

“But that same equipment, some of which was commissioned less than a year ago is already being decommissioned and replaced with the same equipment for all the links from the current $218 million facility. Some of the equipment is just switched off and left on the sites despite the fact that they are still fairly new.

“For example Base Band Processing Unit 3900 has eight slots and normally only one slot is used but now another unit is being bought all in the name of network upgrade. There is also recently installed equipment from the $45 million loan facility that we only needed chips to do the upgrade but in this case they are buying the whole set which was unnecessary.

“My understanding is that we are yet to repay the $45 million loan but we are already decommissioning that equipment. There is definitely more than what meets the eye in the procurement processes of the management.”

Huawei Technologies of China is the one implementing both projects.

“On the new project, Huawei requested from NetOne for a list of the new sites where the new equipment was supposed to go. They were told to replace the existing ones regardless of the fact that some of them were barely a month old.

“For example, generators that are still working well are all being replaced with new ones despite the fact that something of them have just been commissioned such as the one at Jamaica Inn (along Harare-Mutare highway).

“We also have outdoor equipment that can withstand outside temperatures now being turned into indoor. What it means is that by making outdoor equipment, indoor, you now have to put a building such as a container and air conditioners. All this was done in order to create room for management to have a share from the loan through creation of unnecessary expenditures,” said the source.

Another source added: “Nokia Siemens installed base stations at 25 sites for 3G in Harare in 2011. They also came in 2014 to install at other sites. There was also another deal that they would donate flex-BSC (Base Station Controller) on condition that NetOne would buying after testing it.

“But all this equipment is already being decommissioned including the one that was installed in 2014. It was decommissioned in 2015 and replaced with equipment from the current loan which is generally the same with what was already there.

“But Nokia Siemens is still installing equipment at the Gwebi and Nyabira sites. The question is, for how long that equipment will work because everything that they have installed is being decommissioned and replaced with equipment from the $218 million loan facility despite meeting the same specifications. Mind you, NetOne pays cash to Nokia Siemens for that equipment. So effectively, the money is going down the drain.”

The source said there was also another deal with NEC of Japan to install micro cells at busy places or traffic hotspots such as the airport.

“What is the logic of having those micro cells when we recently upgraded our network and the fact that there is an ongoing expansion project under the $218 million loan?

“What is clear is that these were just money-making ventures that were used to siphon money from NetOne. All these things are happening with the approval of a chief technical officer (CTO). The CTO has some questions to answer because it would seem he worked in cahoots with other members of the executive who were looting,” said the source.

Contacted for comment, NetOne board chairperson, Mr Alex Marufu said they were still investigating the allegations.

“I do not have enough information to be able to comment right now. But we have initiated a forensic audit into the business and I believe these things will come to the fore,” he said.

There are indications that the mobile operator could have been prejudiced of millions of dollars through illicit procurement by management that was led by suspended chief executive officer, Mr Reward Kangai.

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  • Gringo

    With all this kind of corruption in almost every sector, sanctions are not to blame for our troubles.

    • Cde Mzvinavhu(Prof)

      Stop your drama Gringo . Sanctions are still a significant constraint on our economy. Both corruption and sanctions must go to hell! Its like removing corrupt management and then starve the company by denying it finance and markets.

      • Kenge

        Finance and market yei. Endai kuEast kwenyu uko iwe Prof. Masanctions ekuzvipa aya.

      • DarkChild

        Prof, it states here clearly that NetOne had access to financing from the China Exim bank. The problem here is greed, corruption and insensitive maladministration.

        • Cde Mzvinavhu(Prof)

          You missed the import of my example. Its not on Netone. I was trying to educate Gringo that , yes we should remove corruption , but that does not mean other problems , like sanctions are not relevant. Its like improving any company`s or country`s governance but someone continues to impose sanctions , that will be negative. You read my example with half of your mind half asleep!

          • DarkChild

            Well then, Prof, I’m far less as educated as you are, but would you go sourcing for water with a bucket full of holes? even if you were to get the water in abundance, the holes in the bucket will make sure all of it is lost along the way. Would it not the make sense to fix the hole in the bucket before going out sourcing for the water? If we were able to loose US$15 Billion dollars as put by our dear leader, what’s the cry for funding all about? Our old hole-ridden bucket lost all of it! Most probably this old bucket is beyond repair – it will be more sensible to do away with it and get a new one. If we had been loaned this US$15 billion and lost it in such a pathetic manner, then my generation and my children’s generation would have been left to pay for it!

  • Sabhuku

    This culture of corruption and looting will be hard to stop ladies and gents. Even supposedly well paid executives, ministers, senior officials in various sectors etc are dipping their hands in the proverbial cookie jar. Reminds me of another culture that is now of major concern; driving habits in Hre and Zim in general. Most people are in a rush from Jan to Dec; muri kumanyirepi going through red lights, overtaking unneccessarily; hooters everywhere.

    • Farai

      “Cde” Sabhuku. You nailed it on the head, the corruption and looting was now massive! Unfettered! Uninterrupted! Maybe even somehow encouraged in the system as long as you eat your loot with the right people. The madness that was now Zimbabwe is exhibited by the low, jungle, deadly, death wish standards of driving. Like you say, everyone (except you and I, LOL) seems to be in a helluva rush to get somewhere at whatever cost. Even foolishly, at the cost of their very own life. Astonishing! Truth is, there is a widespread dereliction of duty by most if not all authorities. I mean look at brazen town council corruption, anyone can build a “house” wherever they feel like, unimpeded, only for the authorities to suddenly awake one day and say, hey, that is illegal! The madness in Zimbabwe knows no bounds!!!!

  • Tinovaziva

    The fish rots from the head.

  • Mzee

    What does this say about our all weather friends. Surely the equipment suppliers a re involved. Look east policy.

  • Sinyoro

    The sanctions mantra is a smokescreen used to divert attention from real issues. All SOEs are tattering on the brink of collapse because of Muchechetere, Cuthbert, Kangai, late Karakadzai to name just but a few. These unqualified CEOs loot with impunity. Even ministers are undoubtedly sanctioning this disgraceful act if Supa Mandiwanzira’s watsapp spat is anything to go by. Cry the beloved country.

  • Cecil Roars

    You can invest millions of dollars in a company like NeOne but nothing changes. With half the amount invested in NetOne companies like Econet would increase revenues up to 3 times. Please sell this to the private sector. Ironically government bought Telecel shares so that it follows in the foot steps of NetOne.

    So if working (and New) equipment is replaced with the same type, what was going to happen to the de-commissioned equipment?

  • Ndaneta

    can this board be seconded to NRZ please

    • EM

      where was the board all along it had to take a new CFO to expose all this rot

  • Cde Mzvinavhu(Prof)

    It pains the nation that we vaunt of the highest literacy in Africa. But our executives in government and parastatals with their heads decorated with Masters to PHD degree caps produce stinking governance. Dejavu grips our nation when reports of scandals continue to unfold in parastatals ,before we forget the scandal that occurred right in the Treasury MinIstry also. Is the nation given the Biblical teaching by Jesus that when we are wronged we must continue to forgive the wrong doers waiting for the Son of God to come back and discipline the culprits.Giving the other cheek as Christ taught the Christians! Have we no means as a nation to get rid of corruption in this country. Have we no leaders in this country who are duty bound to ensure the necessary cleansing? Are such leaders taking the nation for granted? Nehanda forbid!

    • Hacha Duke of Enkeldoorn

      My dear – a thief steals only when the owner of the property gives him the opportunity to do so. How many people in high places have been prosecuted and convicted for corruption in the past ten years yet we cry every day that corruption in high places in Zimbabwe has reached unprecedented levels? The inaction in arresting corruption means that the people vested with the power and authority to act are not interested and are actually benefiting. Take note that all these corrupt people are politically connected and the politicians use them to fund their stay in power. By the way God does not involve himself with such issues. People like you Cde are fully aware of the means that need to be used to get rid of corruption in this country. However your dilemma is like that of members of a family plagued with witchcraft but are all aware that the witch is their own father or mother.

    • DarkChild

      These are the results of the “one center of power” in the ruling party and in government that many have been demonized and victimized for speaking out against. If the center has all power, then Clearly that center should take responsibility for all the mess!

  • UnBanked

    This is just a ploy to pave way for new looters. These ones will go and a new set of to-be-enriched guys will come until the Minister changes and the other comes with a new team. The cycle then continues all over again.

    • Insanity

      Totally agree with you. The charges are borderline frivolous to outrageous. How is one to perform a network upgrade if they are not meant to decommission old equipment?

  • wekedu

    this is true…also the auditors should look at the way the network, using the 218million dollar loan, was planned. Despite having network planners at netone, Huawei was responsible for all the planning. They over dimensioned the network, ####their equipment so that the loan could be used up.

  • Shiku

    Its a shame no one drive satisfaction from just doing a good job. People now want more than their salaries for doing nothing. There are state owned companies with great potential which are useless right now. Examples, NRZ, ZESA, netOne, ZMDC, etc. The problem is ministers employ their friends who’s performance never get appraised until the organisation collapses. If run properly these organisations could greatly improve employment and lead in research and technology in the country. If it was up to me thing would be different.

  • Gudo Guru

    How many have rolled so far?

  • Zvichapera

    It is not Net One alone, there is total rot in government owned companies, which is a reflection of the state of the government itself. The fish rots from the head. Look at the rotten head and get rid of it. That is the solution.

  • gushaz

    Sounds like they were forced to purchase 4G equipment to keep up with the competition? But it was hard on the heels of a 3G investment. The right thing to do is to further invest, even though it doesn’t make much sense when reported.