It’s not Ayoba at MTN

2013-09-01 14:01

A slew of whistle-blowers with allegations of questionable conduct by senior managers and executives at MTN South Africa are behind the recent disciplinary action, resignations and suspensions at the mobile operator.

This is according to Robert Madzonga, MTN South Africa’s chief corporate services officer, who is currently suspended to allow a preliminary investigation into suspicious payments to certain law firms to be completed.

His urgent Labour Court application to lift the suspension was dismissed on Friday, but a separate defamation case continues.

The MTN Group’s response to the various allegations was to initiate a KPMG audit investigation into executives and senior managers at the mobile operator.

However, now that certain executives and managers have been fingered, there are claims that the giant cellphone company is being unfairly selective in who it punishes.

This is a claim that the company denies.

Madzonga is one such executive who feels he is being unfairly treated.

In correspondence between Madzonga and MTN Group CEO Sifiso Dabengwa, Madzonga states:?“By making some comparison with my white counterparts who have recently been in the media for alleged similar transgressions of procurement policy, I found it hard to believe that Eleanor, with such a dossier of transgressions, has been protected by a huge golden handshake and with regard to Mike, nothing has been done. This can only be the fact that there are different rules for different folks.”

Madzonga is referring to Eleanor Potter and Mike Farion, who have both been in the media spotlight over allegations of irregular procurement.

Potter left MTN last week, with a reported golden handshake worth 18 months’ salary, and between R10?million and R15?million in shares.

MTN maintains that Potter did nothing wrong. “MTN can confirm that Eleanor Potter has resigned for personal reasons. She is currently serving her notice period.”

Farion is accused of trying to extort audiovisual appliances from Samsung. MTN has refused to comment on this allegation so far.

Madzonga denies the allegations made against him regarding the irregular payments to the law firms.

In the letter to Dabengwa, Madzonga says: “I again reiterate my stance that the allegations of my collusions with external lawyers are nothing but a scapegoat to get rid of me and in the same process protecting Lily.”

Madzonga is referring to Lily Zondo, MTN SA’s general manager of business risk, who he has lodged a R1.5?million defamation suit against. He has also lodged a grievance at MTN Group level.

“Furthermore, this was used to ensure that I do not contest the new available post at MTN Group of Group Executive: Commercial Legal,” says Madzonga in the letter.

In court papers for the defamation case, Madzonga accuses Zondo of defaming him by alleging in company emails that he had irregularly financially benefited from the MTN sponsorship of the ICT Indaba.

According to Madzonga, this allegation was made in February 2013 and Zondo has refused to retract the statement and apologise.

MTN SA confirmed this week that it was paying Zondo’s legal fees in the defamation case, even though it says that it had not alleged or seen any proof that Madzonga has benefited from the ICT Indaba.

Madzonga maintains that MTN Group’s head of strategy, Karel Pienaar, and former MTN SA head of marketing Serame Taukobong signed off the cheque when no agreement had been signed over the sponsorship deal and the company that was paid the money did not have tax clearance.

This is confirmed by the report compiled by Werksmans Attorneys, which MTN commissioned to probe the sponsorship deal.

In response to questions from City Press this week, MTN SA said the observations made in the report were being addressed.

City Press has seen MTN board minutes and emails that show that one of the alleged questionable payments of R10?million to a law firm was approved by the MTN board.

Madzonga argues this is his letter.

In responses to questions from City Press this week, MTN SA said: “As part of the ongoing process of ensuring proper governance and effective management, MTN commissioned an audit which was conducted by KPMG.”

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