Dar es Salaam — Tanzanian authorities on Wednesday charged Vodacom Tanzania MD Hisham Hendi  and other telecom executives with economic crimes, court documents show.

Hendi, who is Egyptian, and other telecom executives “intentionally and wilfully organised a criminal racket, which caused the government ... to suffer a pecuniary loss” of more than 5.9-billion Tanzanian shillings ($2.55m), the documents said.

They were not allowed to enter a plea nor apply for bail, and were held in police custody until the case comes up on April 17, a court official said. 

They did not respond to calls for comment following the issuing of charges.

Vodacom, a subsidiary of SA’s Vodacom Group, is Tanzania’s leading telecom company by the number of mobile subscribers, with about 32% of the country’s 40-million mobile subscribers, ahead of Tigo Tanzania, a subsidiary of Sweden’s Millicom, and a local unit of India’s Bharti Airtel.

Earlier on Wednesday, the company said Hendi and several other employees were questioned by the police over the alleged fraudulent use of network facilities.

“Vodacom Tanzania  can confirm that it is fully co-operating with an investigation led by the Tanzania Police Force,” Vodacom Tanzania said in a statement.

Hendi was appointed as MD last month after serving as acting CEO  since September 2018. The government denied a work permit to the company’s first choice for chief executive, a Kenyan, it said at the time.

The company said earlier Hendi was not immediately available to comment.

Magufuli’s anticorruption drive

After taking office in 2015, President John Magufuli launched an anticorruption drive and vowed to stamp out tax evasion by multinational companies in Tanzania’s mining and telecoms sectors.

In 2016, Magufuli’s government demanded that telecom companies list at least 25% of their shares on the local stock exchange.

Vodacom is the only telecom firm to have listed. It raised $213m  in the initial public offering, Tanzania’s largest ever, which attracted more than 40,000 local investors, most of whom were first-time participants in the country’s stock market.

In June, prosecutors charged CEOs  of telecoms operators Halotel Tanzania, owned by Vietnam-based Viettel, and Zantel with fraudulent use of network facilities. The executives were later released after paying a fine.

Authorities last year charged five current and former employees of Acacia Mining, the country’s largest gold miner, with money laundering and tax evasion.