NetOne plunges into governance crisis . . . board becomes dysfunctional

31 Jul, 2020 - 00:07 0 Views
NetOne plunges into governance crisis . . .  board becomes dysfunctional

eBusiness Weekly

Business Writer

A governance crisis is taking a heavy toll on NetOne as the board of Zimbabwe’s second largest mobile phone operator has become dysfunctional following resignations and dismissal of four of its directors.

The other three are facing criminal charges, with one of them already on bail. Corporate governance experts warned such state of affairs require immediate action to avert a potential governance crisis.

“The board is depleted and the question is who is now providing oversight,” asked one corporate governance expert who participated in the crafting of Zimbabwe National Code of Corporate Governance.

“It is in the best interest of the company to have all members with issues at the courts; with police, whatever to be cleared first. Meanwhile the Government can appoint an interim overseer to allow all outstanding issues to be resolved. But just leaving it as it is clearly undermines the basic tenets of good corporate governance practices.”

Several efforts seeking a comment from the ministry’s permanent secretary were not successful.


In February this year, three directors, including its chairperson James Mutizwa resigned under unclear circumstances. Other board members were Sibonile Dhliwayo (audit committee chair) and Keuemetsi Mupandawana (human resources committee chair).

Paradzai Chakona was dismissed in May for alleged misconduct while Dr Douglas Mamvura was never accepted as board member despite evidence showing that he was appointed by the parent ministry in October last year. He was never invited for a single board meeting.

Of the remaining four board members, Dr Ranga Mavhunga was arrested for perjury while Susan Mutangadura, the acting chairperson, is also wanted by the police for similar charges. The police have confirmed it is keen to interview the former chair of the Institute of Directors of Zimbabwe.

The perjury charges (lying under oath) against Mutangadura, a legal practitioner and Dr Mavhunga arose after the two allegedly lied that Dr Mamvura was not a board member of NetOne.

The alleged lie was made in opposing affidavits filed by Mutangadura and supported by Dr Mavhunga in a case in which chief executive Lazarus Muchenje sought his suspension nullified because the resolution to suspend him was not unanimous since Dr Mamvura was not involved.

Conflict of interest

Mutangadura, Dr Mavhunga and another director Winston Makamure are being investigated for criminal abuse of office involving not declaring their interests.

Mutangadura is alleged to have appointed her business associate — Retired Justice Moses Chinhengo — to preside over Muchenje’s disciplinary.

The appointment of Rtd Justice Chinhengo touched off storm given that Mutangadura, the complainant against Muchenje — is a panellist at Africa Institute of Mediation and Arbitration, a company founded by the retired judge.

Charges against Muchenje have since been dropped. He was reinstated about three weeks ago but was immediately fired on a three months’ notice.

Muchenje challenged his dismissal at the High Court, arguing that his sacking was irregular and an interim relief was granted. The matter will be heard on August 4. Meanwhile, NetOne was ordered not to advertise his job pending hearing of the matter.

With regards to Dr Mavhunga, it is alleged that the chief executive of micro financial institution FMC entered into a business partnership with NetOne but did not declare his interests.

As part of the investigation, the law enforcement agents sought and obtained a warrant of search and seizure from a Harare magistrate.

NetOne sought an interdict at the High Court, arguing some of the documents the police had requested contained information outside the scope of their investigation. It was granted on June 3.

A report has been filed at the Zimbabwe Anti-Corruption Commission against Makamure for his involvement in an interconnection deal between NetOne and Liquid Group, a subsidiary of Econet.

The report alleges that chief executive of Liquid (a subsidiary of Econet), Mr Wellington Makamure is brother to Winston. As such, he should have recused himself from the negotiations since he is conflicted.

This leaves the Netone board with only one director, Dr Beulah Chirume seconded by the ministry.

“At a time there is much talk about strengthening corporate governance at public enterprises, it is surprising that no one seems to be concerned,” Ratidzo Mutema, an executive with a human resources consultant noted.

“Those who are responsible are not being decisive.

“NetOne is a potential cash cow for the government, with great potential to compete with Econet.

“It belongs to people, to the public and those appointed to run the affairs of such entities should drop the mentality of running them like their businesses.”

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