The ruling by the Special Tribunal that dismissed MTN’s application for exception related to the unsolicited supply of 10 000 cellphones during the Covid-19 era is the latest in a series of reputation damaging cases for the South African mobile operator.
MTN has previously been embroiled in tax fraud, corruption and other reputation damaging cases at home and abroad over the past few years. In October last year a Lagos tax appeal tribunal ordered MTN to pay $72.5 million (R1.3 billion currently) to the Nigerian Federal Inland Revenue Services for tax defaults.
The Special Tribunal has just dismissed MTN’s exception application linked to the supply of 10 000 mobile devices to the Limpopo Department of Health for Covid-19 screening. This followed an investigation by the Special Investigating Unit (SIU) into the affairs of the Limpopo Department of Health.
“The SIU’s investigation revealed that MTN made an unsolicited proposal to supply the department with 10 000 cell phone devices intended for Covid-19 mass screenings in Limpopo Province. This proposal costs the department R10 million (and) falls outside the prescripts (of the) Public Finance Management Act (PFMA),” said the SIU on Friday.
It added that the Department of Health had accepted the proposal and subsequent delivery of the devices although 9 588 cellphones were not distributed to the intended users as the department could only manage to distribute 388 cellphones of the total under the contract.
“The SIU’s investigation also found that the former head of the department, Dr Thokozani Florence Mhlongo, as the accounting officer, allegedly exposed the department to a wasteful expenditure when she authorised the procurement and payment of 10 000 cell phones to the value of R10 million for Covid-19 household screening,” it said.
Recently, and with South Africans focusing on the May elections and the subsequent consummation of the Government of National Unity (GNU), MTN closed another deal with the government that has seen questions raised over links to President Cyril Ramaphosa. Under the new deal, MTN has been picked for implementation of digitalisation of water and electricity supply for about 257 South African municipalities.
The contract, awarded by National Treasury, will see MTN supply, install, manage and maintain smart metering programmes across the country under a project said to be ‘severely imposed’ on municipalities, with President Cyril Ramaphosa reportedly pulling the strings to make the deal happen.
Ramaphosa’s spokesperson Vincent Magwenya, however, denied that Ramaphosa was linked to the MTN deal, saying “the president cannot and does not have any operational involvement at MTN” at the moment.
MTN has also previously been embroiled in a bribery scandal in Iran where the company was alleged to have paid South Africa’s ambassador to the country about $200 000 to help the company land an operating licence there.
BUSINESS REPORT