Vodacom TanzaniaVodacom Tanzania MD Hisham Hendi and other telecom executives had last week been arrested by Tanzanian authorities on the 10 counts of economic crimes they had committed. The five appeared on Kisutu Resident’s Magistrate Court yesterday before Principal Magistrate Huruma Shaidi to answer to these charges.
Hisham Hendi, the recently appointed managing director for Tanzania and other telecom executives had been accused of fraudulent use of network services without authorisation and this had caused the Tanzanian government major loss of revenue. “They intentionally and wilfully organised a criminal racket, which caused the government to suffer a pecuniary loss” of more than 5.9 billion Tanzanian shillings,” according to the documents presented to the Dar es Salaam court.
This comes after John Magufuli, the Tanzanian president who rose to power in 2015 and his intense fight against corruption and tax evasion by multinational companies with a focus on telco and mining companies. Various telcos in the country have already been charged and fines paid including Halotel and Zantel. Airtel also had to give a sector of its local unit to the country early this year after claims that it had illegally gotten initial shareholding.
Hisham Hendi, an Egyptian, was serving in an acting capacity as the chief executive since September 2018 after the Tanzanian government denied their first choice of CEO, Sylvia Mulinge, who was the then Safaricom’s head of consumer business unit – she’s now Safaricom’s Chief Customer Care Officer. Vodacom Tanzania is a subsidiary of South Africa’s Vodacom Group and the leading telco in the East African country having 32% of Tanzania’s 40 million mobile subscribers.
The telco had been co-operating with the Tanzanian authorities to resolve the ongoing investigation. The accused pleaded guilty and on Thursday, Vodacom Tanzania agreed to terms for the release of its managing director and the other telecom executives and paying more than 6 Billion Tanzanian shillings compensation. The court also confiscated all the communication equipment that was involved in the crimes committed. The telco also paid 5.28 Billion in order to settle the DPP-initiated charges.
Vodacom also hired a leading global law firm to internally review the details underlying these charges.