eBusiness Weekly
Business Writer
The boardroom squabbles bedevilling NetOne, have reportedly sucked in a Cabinet Minister who is alleged to have pressured some board members to step down. NetOne, the State-owned telecoms giant formed in 1996 as the first cellular network provider in Zimbabwe, is the country’s second largest mobile phone operator with about three million subscribers.
The company plunged into leadership crisis following resignations of directors, including its chairman James Mutizwa last month after allegedly being coerced to step down by the Minister of Information Communication Technology Jenfan Muswere.
Chief executive, Lazarus Muchenje and acting chief finance officer Tinashe Severa, have since been suspended without pay and benefits over alleged incompetence charges.
Muchenje has approached the High Court, seeking nullification of his suspension.
Some highly placed people familiar with the matter told Business Weekly that the goings on at NetOne “exhibited an external hand” pointing out “undue” interference by the minister.
“The three board members; Mr Mutizwa, Ms Sibonile Dhliwayo (audit committee chair) and Mrs Keuemetsi Mupandawana (human resources committee chair), were told to resign or face the embarrassment of getting fired,” one source revealed.
“This was after the board had met Minister (Jenfan Muswere) in January.
“At the meeting, the minister diverted from the original agenda and went on to ask specific issues concerning audit and HR committees. Unfortunately, Ms Dhliwayo and Mrs Mupandawana were not prepared to provide comprehensive details since the matter was not on the agenda much to the disappointment of the minister.
“As for the chairman, the board evaluation provided contrasting views about his performance. Three board members had highly rated him while the other gave him very low marks.
“The minister then concluded he can’t be chairing a divided board.”
Minister Muswere had no kind words for this publication, accusing it of not being unprofessional after some repeated calls seeking his comment.
“Why do you call me as if I owe you. You don’t force me to comment. Is it what you are being told by the Ministry of Publicity. That is abuse and don’t call me again,” said Minister Muswere.
Calls to NetOne acting chair Susan Mutangadura went unanswered.
In his resignation letter on February 5, Mutizwa said his decision to step down was motivated by personal reasons. Dhliwayo cited the unprofessional manner the board was being run, which made it difficult for her to render her services in an objective manner.
Mupandawana did not disclose the reasons for her resignation. In terms of Section 15 of the Public Entities Corporate Governance Act, where two or more members resign, whether simultaneously or within a period of one month, the line minister may conduct an investigation in order to ascertain the reasons for their resignations.
And any findings made by the line minister shall be communicated, without delay, to the Office of the President and Cabinet and a special inquiry may also be conducted.
Following a spate of resignations, the board no longer has functional committees.
Sources said the role of the committees had been usurped by individual board members particularly Mutangadura, Makamure and Dr Mavhunga, who are now carrying out the work of committees as individuals and without any structured meetings. Paradzai Chakona is said to be side-lined while another board member Dr Douglas Mamvura, has been blocked from attending meetings since his appointment in October last year.
Background
Following the appointment of the NetOne directors in December 2018, the board resolved to institute a forensic audit covering the period 2015 to 2018.
The board then requested the Office of the Auditor General to perform the forensic audit that in turn appointed Deloitte & Touche to conduct the audit on its behalf.
Under unclear circumstances, the former chairman is understood to have unilaterally extended the audit period up to June 30, 2019.
Other board members felt it was only proper to have the first audit completed, then institute another if need be.
“The extension of the audit seemed to have been targeted at Muchenje (the CEO). The attention had already shifted from the terms of reference of the first audit,” said a source.
Mutizwa also came up with new terms of reference. In January 2020, the draft audit report (extended) was presented to the board.
However, the draft audit did not find any proof of fraud, embezzlement or theft on the part of any of the management team.
The fissures and conflict among members worsened at this point when some of the board members namely, Mutangadura, Mavhunga and Winston Makamure disapproved the findings and wanted to further extend the audit.
The three insisted there were underhand dealings at NetOne and wanted the forensic audit extended.
On the other hand, the other four board members, namely Dhliwayo, Mupandawana, Paradzai Chakona and Mutizwa wanted the board to first deal with the current audit process, get the final report with its findings and recommendations.
Only then could the board evaluate the probability of further (for the second time) extending the forensic audit.
This worsened the dispute as the board was now split.
Members who wanted an extension of completed forensic audit failed to get the majority vote.
The board finally agreed that the areas of concern should be addressed through internal audits that would be done under the supervision of the audit committee chair.
Internal audits
A series of internal audits were commissioned after the forensic audit did not identify any fraud, theft or embezzlement. They were in fact an extension on scope and period of the original forensic audit. Among the items to be audited were Zanu PF congress furniture donation, petty cash, and operations at Bureau de change.
They were finished in February 2020 and again no evidence of embezzlement or fraud was found. These internal audits were done from mid-January 2020 to mid-February 2020, and were supposed to uncover fraud that had not been detected by the forensic audit.
Board over reach
Following the suspension of Muchenje, the board appointed acting CEO Chipo Jaisson from second tier management and yet there are two substantive chief officers, namely Mr Gutu, chief technical officer and Mr Nyashanu, chief human resource officer.
Muchenje was suspended, without pay and benefits, on February 20 for alleged incompetence and inefficiency in discharging his duties as well as negligence.
The suspension would allow for an independent investigation into the alleged conduct. He is challenging his suspension, arguing the board meeting which resolved to suspend him, alongside acting chief finance officer was irregularly convened.
