Anxiety as Safaricom hires audit firm to probe suspect contracts

Safaricom Chief Executive Bob Collymore has said employees who have left his firm over fraud were actually way more than the 58 reported in the past week.

Many more had opted to resign before investigations into the suspect deals were launched, vindicating findings of various surveys that revealed massive corruption in the private sector.

“They were probably just under 100,” Mr Collymore told The Standard in an interview yesterday, in reference to the number of employees who had left employment at Safaricom in the last year.

Some of those who were suspected to have abused their positions to abet fraud in the giant firm had opted to walk out quietly.

“There is really nothing you could do to someone who has resigned and left,” Collymore said.

“It was critical to show the shareholders and other stakeholders that we have a problem, and that we are finding solutions,” he added, in justifying the decision to make public the sackings.

 Collymore said his firm had contracted the services of audit firm KPMG to carry out a forensic audit of all its procurement with a view of pointing out contracts that had been won illegally.

In one case that is now the subject of a court case, a Lebanese company is demanding more than Sh1 billion due to alleged wrongful termination of a contract entered with Safaricom in June last year. Safaricom cancelled the contract in September last year alleging that the firm, Mobinet S.A.L.

, had colluded with some of its own staff to secure the deal that would involve the supply of a work-flow management system.

Collymore said the costs were overly inflated and reads collusion with members of the tendering committee, informing the termination. More supply contracts, as the one with Mobinet, will be cancelled and the perpetrators could be sacked and prosecuted, indicating that many more employees could be on the firing line.

Corporate fraud

Among the other potentially big criminal cases over which Safaricom had sacked its workers relates to the replacement of SIM cards. Often, insiders would collude with agents to execute the replacements before a customer’s cash balances held in the virtual accounts of either M-Pesa or M-Shwari are drained.

Some employees had also been involved in conning of customers by enrolling them for services not sought.

“The minimum amount that we have fired an employee over is Sh100; for us, fraud is fraud,” Collymore said.

It is the second time the firm has gone public about the number of workers it had fired over links to fraud. KCB has also gone public about the involvement of its staff in fraudulent deals.

Last year alone, KCB fired 90 workers over fraud, affirming the rot in the country’s private sector. A survey carried out last year by audit firm Ernest & Young ranked Kenya among the four worst hit countries by corporate fraud, only beating Nigeria, Egypt and Namibia in the list of shame rankings.

Most fraud incidents were perpetrated by middle-level managers, the survey found out. The report indicates that over a quarter (27 per cent) of Kenyan managers in the private sector admit that their organisations have experienced a significant deal of fraud.