Zimbabwe’s Net One Loses US$ 41, 652, 070 to Fraudsters

AN audit report into the operations of Zimbabwe’s  NetOne  reveals that the struggling mobile service provider lost millions of dollars through fraudulent activities allowed to thrive because of lack of supervision by,among others  at the company’s Harare head office.

The confidential report compiled by BCA Forensic Audit Services dated November 12 2012 shows that NetOne suffered financial prejudice as a result of fraudulent actions and the negligence of employees and shop management.

Several employees were fingered in the fraudulent activities, among them Wellington Dodzo, a regional sales representative employed in March 2011. Dodzo was employed while on bail facing criminal charges of 30 counts of theft from Delta Beverages in Bulawayo (ZRP Bulawayo central CR 285/5/09 and CID Fraud Bulawayo DR1615/09).

“During his tenure of office he committed a series of fraudulent activities against NetOne in Bulawayo. The amount outstanding from his account of stock which he took arose from US$190 205 on 31 October 2011 to US$852 796 as at 31 July 2012,” reads the report.

“Our investigation revealed that he was in the practice of collecting cash from dealers and vendors without issuing receipts, and would not remit some of the cash to the NetOne office.”

According to the report, unaccounted-for airtime recharge cards taken by Dodzo from the Jason Moyo Shop in Bulawayo as consignment stock for distribution to dealers and vendors stood at US$465 148.

“Mr Dodzo cannot account for the stock. He created fraudulent documents to try and camouflage the stock shortages,” reads the audit report.

It highlighted that the company’s policies and procedures were not being followed. The regional account manager was well aware that his subordinates were flouting policies and procedures, but allowed the practice to continue by not taking corrective action.

“In this regard they allowed vendors to access products at 15% commission on credit or consignment, whereas their conditions provide that vendors buy on cash basis and they are entitled to 10% commission. This practice resulted in NetOne suffering financial prejudice amounting to US$416 520,70,” says the report.