Upheavals rock NetOne Cellular

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TROUBLE is once again brewing at the country’s second biggest mobile network operator, NetOne, amid accusations of political interference and a fresh bid to oust its highly regarded chief executive officer, the Daily News can reveal.

This comes as the targeted CEO, Lazarus Muchenje, has been credited with turning around the fortunes of the government-owned company, after guiding it from a loss-making position to commercial sustainability in the two years that he has been at its helm.

Lazarus Muchenje, Chief Executive

So good has been business at NetOne over the past year that the mobile network operator is set to declare a rare dividend to the government this year, on the back of its impressive results.

Amid all this, the company has also been hit by the resignation of three board members over a number of issues — including several contested forensic audits, which did not find any corporate governance malpractices by executives.

Lawyer James Mutizwa, the NetOne chairperson, is among those who have left, together with Sibonile Dhliwayo and Keuemetsi Mpandawana — who chaired the audit and human resources committees respectively.

“Many people are concerned with the manner in which some board members have effectively tried to destabilise the company by ordering audits which were largely seen as out of sync with the MNO’s current dynamics and impressive performance.

“And despite the fact that the initial forensic audit did not find any wrongdoing on the part of the company’s management, some of the board members have gone on to order eight more audits, which is inexplicable.
“This has caused disquiet within the board, resulting in chairman James Mtizwa and two others, including the board member who chairs the audit committee, resigning,” a well-placed source told the Daily News at the weekend.

“The biggest question for many of us is why and to whose benefit these people are trying to destabilise NetOne’s current winning team and strategy,” another source said.

In a letter to Information Communication Technology permanent secretary Sam Kundishora, Dhliwayo said the board was being run unprofessionally and to the detriment of NetOne.

“Please accept this letter as my formal resignation from NetOne (Private) Limited’s Board of Directors with immediate effect.

“The reason behind my resignation is that the Board is currently being run in an unprofessional manner which makes it very difficult for me to render my services and responsibilities in a professional objective manner,” she said.

Dhliwayo was the chairperson of the audit committee and is said to have been miffed by the “irrational and unilateral” decisions by some board members to order more audits after the first one — which sources say prompted Muchenje and other executives to raise a complaint with acting board chairperson Susan Mutangadura last week.

“Management’s view is that these audits are currently disrupting and negatively affecting NetOne’s commercial turnaround which to date has been quite successful.

“To evidence this, under current management, NetOne’s monthly revenue increased by 977 percent from $9,9 million in February 2019 to $107 million in December 2019.

“Unfortunately, due to the disruptive impact of these audits amongst other disruptive interference from some board members, our monthly revenue for January 2020 for the first time since February 2019, went down month-on-month by 6 percent — from $107 million in December 2019 to $102 million, which is not in line with our shareholder’s expectations that we increase our market share from 15 percent to 40 percent in 2020,” Muchenje wrote to Mutangadura.

“The audit function, though important, in management’s view does not equate to or result in effective oversight and management.

“The audit function cannot be used to substitute effective oversight and management as is the case now,” Muchenje’s letter said further.
Meanwhile, the resignations of Mutizwa, Dhliwayo and Mpandawana have prompted NetOne workers to write to ICT minister Jenfan Muswere, protesting the current developments at the company.

“This unprecedented development in this organisation is bound to disturb the positive trajectory which the company was taking and starting to enjoy.

“We have been through this unfortunate experience before and we remain worried as it causes a myriad problems of instability and retrogressive mud-sliding.

“We have taken the initiative to approach your esteemed office so that you can intervene and find a lasting solution to the problem that is in our midst,” the workers said in their letter.

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