Neotel CFO quits amid bribery claims

2015-11-27 13:06 - Gareth van Zyl
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Johannesburg - The chief financial officer of fixed-line telecommunications company Neotel Steven Whiley has resigned after being placed on special leave, says the company.

Whiley, along with chief executive officer Sunil Joshi, were placed on special leave earlier this year amid a report from newspaper The Mail & Guardian which said that Neotel stands accused of making illicit payments of R91m in fees to a ‘letterbox company’ company called ‘Homix’.

Neotel is accused of making these payments to win a R1.8bn telecoms services contract from transport parastatal Transnet. Meanwhile, Homix is accused of receiving the payments while not producing any work and it has untraceable directors and no clear office space.

Auditors Deloitte are said to have notified the telecom company’s board of directors in April and reported the issue to the Independent Regulatory Board of Auditors (IRBA).

But now Whiley has stepped down, according to a terse statement from Neotel.

“The placing of Mr Steven Whiley on leave was a board initiated process, whilst an investigation was being conducted into certain transactions involving Neotel (Pty) Ltd and Homix,” Neotel said in a statement on Friday,” said the company.

“Mr Steven Whiley complied with this process, cooperated therewith and fully supported the board of Neotel, for which the board is most grateful. With the information currently at its disposal the Board is satisfied that Steven Whiley has at all times acted with integrity.

“As a result of the lengthy duration of the investigation, Whiley has decided to pursue his own interests, and will resign from Neotel with effect from 30 November 2015,” added Neotel.

The announcement about Whiley’s resignation also comes after the Competition Tribunal of South Africa agreed on Monday to indefinitely postpone a hearing regarding a R7bn merger between Vodacom [JSE:VOD] and Neotel.

The deal has been approved by the Competition Commission and the Independent Communications Authority of South Africa (Icasa) and is facing one of its final hurdles at the Competition Tribunal.

However, Vodacom asked for a postponement of the Tribunal hearings earlier this week because it is exploring “a revised transaction structure” of the Neotel deal.

The mobile network didn’t disclose further what it meant by “revised transaction structure”, sparking speculation about whether the deal will still go ahead.

Vodacom and Neotel are set to address the Competition Tribunal on December 7 again to communicate the status of the proposed deal.

Read more about: vodacom  |  neotel  |  corruption