The once-proud national mobile operator, NetOne, is teetering on the brink of collapse, a grim reality laid bare in a damning audit report released last week. Acting Auditor-General Rheah Kujinga has declared the company technically insolvent, with liabilities exceeding assets by a staggering ZWL$32 billion as of December 2022. The report paints a bleak picture of a company crippled by debt, mismanagement, and a culture of rampant fraud that has bled the organisation dry.
“The company’s total liabilities exceeded the total assets by ZWL$32 billion, while the current liabilities exceeded the current assets by ZWL$20,9 billion (2021: ZWL$20,5 billion),” Kujinga stated in the report, highlighting the precarious financial position of the company. “These conditions indicate that a material uncertainty exists that may cast significant doubt on the company’s ability to continue as a going concern.”
The Auditor-General’s findings have caught the industry by surprise, raising serious questions about the future of NetOne and the government’s ability to salvage the company. The report reveals a litany of financial woes, including a staggering ZWL$40 billion loss for the financial year ending December 31, 2022, a significant increase from the ZWL$31 billion loss recorded the previous year.
The report also highlights the company’s struggle to manage its debt, with post-paid customer accounts left outstanding for months despite the company’s own debt management policy mandating suspension of services after 90 days. This blatant disregard for internal policies underscores the systemic mismanagement that has plagued the company.
However, the report’s most damning revelation lies in the exposure of a culture of fraud that has permeated NetOne’s operations. The Auditor-General’s findings are not merely a reflection of financial mismanagement, but a symptom of a deeper malaise that has plagued the company for years. The report comes on the heels of a string of high-profile fraud cases involving NetOne employees, highlighting a disturbing pattern of betrayal and greed within the company.
In January 2023, four NetOne employees were arrested for allegedly stealing airtime worth ZWL$600 million in a sophisticated cybercrime operation. The accused, who allegedly stole pin-less credit airtime and sold it at a discount to dealers, used their ill-gotten gains to purchase luxury cars and properties. This incident was just the tip of the iceberg, a stark reminder of the pervasive culture of fraud that has plagued the company.
In June 2022, the Zimbabwe Anti-Corruption Commission (ZACC) arrested a NetOne cashier for stealing at least $150 million in an elaborate airtime voucher scam. The cashier, who went on a car-buying spree, splurged on at least six vehicles over a three-year period, showcasing the audacity of the fraud.
More recently, in April of this year, police in Gokwe launched a search for two NetOne employees who allegedly defrauded the company of US$94,793. The theft was discovered during an internal audit, with the alleged fraud taking place between October 13, 2023, and November 18, 2023. The police investigation revealed that a discrepancy of US$94,793 was discovered during a sales reconciliation at the Gokwe shop, highlighting the systemic nature of the fraud.
These are just a few of the many fraud cases that have plagued NetOne, with many others likely going undetected. The sheer scale and frequency of these incidents point to a systemic failure within the company, a failure of leadership, oversight, and internal controls. The culture of fraud has not only eroded the company’s financial stability but also tarnished its reputation, leaving customers and stakeholders questioning its integrity.
NetOne’s woes have been exacerbated by the economic challenges facing Zimbabwe, including the persistent foreign currency shortages and the depreciation of the local currency. The company has struggled to charge cost-reflective tariffs, making it difficult to raise funds for essential maintenance services and equipment upgrades. This has further weakened the company’s financial position, making it vulnerable to exploitation by unscrupulous employees.
