Vodacom alleged to have caused Sh470m loss to Tanzanian government

Vodacom Tanzania said on Thursday the government had accused it of causing an USD4.76 million loss (Sh470 million) linked to allegations of fraudulent use of network facilities against its managing director and other executives.

A bail application for the individuals in police custody will be heard in (the) next few days,” Vodacom Tanzania said in a statement. The company also said that it had appointed South African Jacques Marais as acting managing director.

Marais was appointed to “ensure the company’s operations continue free of interruptions and has initiated an internal investigation into the matter,” the company said.

Tanzanian authorities on Wednesday charged the managing director of Vodacom Tanzania and other telecom executives with economic crimes, court documents showed.

Egyptian Hisham Hendi and other executives “intentionally and wilfully organised a criminal racket, which caused the government ... to suffer a pecuniary loss,” the documents said.

They were not allowed to enter a plea or apply for bail, and are being held in police custody until the case comes up on April 17, a court official told Reuters.

Reuters was not able to contact legal representatives for the detained executives on Thursday.

Vodacom, a subsidiary of South Africa’s Vodacom Group, is Tanzania’s leading telecom company by the number of mobile subscribers, with about 32 percent of the country’s 40 million mobile subscribers, ahead of Tigo Tanzania, a subsidiary of Sweden’s Millicom, and a local unit of India’s Bharti Airtel.

“Vodacom Tanzania reiterates that it will continue to cooperate with the investigation,” it said.