Dar es Salaam, Tanzania. Vodacom will list on the city's stock exchange, to meet government requirements. Picture: MUHAMMAD MAHDI KARIM
Dar es Salaam, Tanzania. Vodacom will list on the city's stock exchange, to meet government requirements. Picture: MUHAMMAD MAHDI KARIM

SA’s largest mobile operator by subscribers, Vodacom Group, has confirmed that charges have been brought against a number of its employees at their Vodacom Tanzania operation, including MD Hisham Hendi.

A Vodacom spokesperson told Business Day that “the Tanzania Police Force questioned certain employees, on allegations of fraudulent use of network facilities”.

“Various charges have now been levelled against some of these employees in a Dar es Salaam magistrate's court and they are currently in police custody, including Mr Hendi.”

Authorities have accused the group of operating a “criminal racket”, according to court documents filed in the country’s capital.

They also claim that the employees deprived the government of 11-billion shillings (R68m) in revenue.

Commenting on the allegations, Old Mutual Equities analyst Philip Short said “that’s not good for sentiment. We have seen actions against companies like MTN by other African countries where they take quite a harsh stance.”

Vodacom’s biggest competitor, MTN, faced a number of accusations in countries like Nigeria in recent years over regulatory and tax breaches.

Fortunately, the Tanzania operation is not as big for Vodacom as Nigeria is to MTN, which may quell investor worries at group level, said Short.

In a country with 57-million people, Vodacom had 35-million customers in the East African country at the end of December.

“A bail application for the individuals in police custody will be heard in the next few days at the same court,” the Vodacom spokesperson said.

“One has to follow this story with a close eye as a shareholder,” Short said.

In 2018, Tanzanian authorities levelled similar charges against executives at mobile operators Halotel Tanzania and Zantel as part of President John Magufuli’s crackdown on corruption.  

“The board of Vodacom Tanzania Plc has appointed Jacques Marais as acting MD to ensure the company’s operations continue free of interruptions and has initiated an internal investigation into the matter,” Vodacom said.

“Vodacom Tanzania reiterates that it will continue to co-operate with the investigation and that it upholds the highest standards of business integrity, ethics and good corporate governance,” the company said.

gavazam@businesslive.co.za