The two most senior staff at network operator Neotel – CEO Sunil Joshi and chief financial officer Steven Whiley – have been placed on special leave by the Board of Director of the fixed and mobile service provider after the pair have been accused of bribery and corruption.
The company told TechCentral that the “special leave” was enacted after certain irregularities started to pop up during a recent audit by Deloitte.
“In the course of Neotel’s most recent audit, certain alleged irregularities were raised by Neotel’s external auditors. On learning of the irregularities, the Neotel board took immediate action, mandating an independent investigation,” it said.
It further explained that issues were flagged up in the payment processes.
“The investigation concluded that the irregularities indicated a possible non-compliance with the company’s internal procurement and payment processes. Neotel is committed to the highest standards of corporate governance, and will not tolerate any deviation from these standards.”
Neotel said that it has set up a subcommittee that will be leading the investigation the non-compliance and payment processes “to ensure the strengthening of the company’s policies, procedures, internal controls and governance. The CEO and CFO have taken special leave in co-operation with this investigation.”
There is a concern that the temporary departure of the CEO and CFO coupled with the bribery investigation could influence Vodacom’s take-over of the company.
According to the Mail & Guardian, Neotel forked over millions of rands in commissions to Homix to ensure it got deals in excess of R2 billion from Transnet.
“Neotel, Deloitte says, remitted R30-million to Homix in April last year and R36-million in February this year. Another R25-million was agreed but not yet paid. Each was in respect of contracts being secured with Transnet, a key Neotel customer,” M&G wrote.
Neotel’s board has reported the payments to the police, and Deloitte reported the situation to the Independent Regulatory Board of Auditors (IRBA).
* Developing story