The probe will focus payments made to a third party that may have been part of a payment to secure a R1.8 billion contract with Transnet.
The company on Friday rushed to soothe the market amid speculation the potential scandal could even derail Vodacom’s R7 billion bid to buy the company. “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,” the company said in response to questions from TechCentral.
“The investigation concluded the irregularities indicated a possible noncompliance 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,” it said. The board has further appointed a subcommittee to continue an investigation into the noncompliance and 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.”
According to a report in the Mail & Guardian, Neotel may have made dodgy payments to a company called Homix to secure a telecoms contract worth R1.8 billion from state-owned Transnet. It was not able to establish who is behind Homix. The Homix website – www.homix.co.za — is registered to a Yakub Bhiku of Mayfair West in Johannesburg, website registration records show.
Quoting correspondence from Neotel’s auditors, Deloitte, which the M&G said it has seen, Neotel paid a 2% “success fee” to Homix of R36 million to secure the Transnet deal. In addition, Homix was promised a further R25 million to secure the related sale of Neotel assets to Transnet, though this money hasn’t been paid.
The report has raised questions about the role of Transnet finance chief Anoj Singh, as well as Neotel’s Joshi, in the payments to Homix. Joshi allegedly ordered his staff to pay Homix after meeting with Singh and securing payment from Transnet to Neotel. The M&G said Transnet has denied Singh
was party to any discussions about a payment to Homix.
Vodacom spokesperson Richard Boorman declined to comment on what impact the developing scandal could have its chances of buying Neotel. “This is a matter for Neotel, its board and shareholders. We are monitoring developments and have nothing to add,” Boorman said.
– NewsCentral Media