Home Business NetOne parts ways with suspended CEO Lazarus Muchenje

NetOne parts ways with suspended CEO Lazarus Muchenje

by Byron Adonis Mutingwende
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NetOne CEO Lazarus Muchenje’s turbulent tenure ended following the immediate termination of his employment contract by the NetOne Board of Directors, which this publication can reveal.

The basis of termination appears to be what Muchenje has been clamouring for at the High Court. Since his appointment to NetOne as the Chief Executive Officer, in April 2018 his journey can be best described as a Hollywood movie.

On the 27th of July 2018, barely three months after being appointed, he unilaterally fired nine (9) Senior Executives without prior consultation or approval by the then Chingoka led Board of Directors, in line with the Corporate Governance and Public Entities Act.

His actions were immediately overturned by the Board effectively reinstating the nine (9 )Executives. Much to Muchenje’s frustration, he challenged the Board’s decision and sued the entire Board, the then Minister of Information Communication Technology (ICT), Postal and Courier Services Supa Mandiwanzira as well as the Office of the President and Cabinet.

He was then suspended, four months into the job pending disciplinary action. The day before his disciplinary hearing, the entire Board was dissolved by the then-new Minister of ICT, Postal and Courier Services Hon Kazembe Kazembe.

In December 2018, a new board was appointed. They did not have institutional memory on Muchenje’s pending hearing and they resolved to give Lazarus the benefit of doubt and reappointed him as NetOne CEO in February 2019.

A year later, in February 2020 Muchenje was suspended once again, by the same Board after both internal and external audits unearthed several incidents of abuse of office, all of which are tantamount to corruption.

The Board engaged the Zimbabwe Anti-corruption Commission (ZACC) which successfully completed criminal investigations. Muchenje is facing numerous administrative and criminal charges in which he is accused of swindling NetOne huge amounts of money whilst potentially prejudicing the company of at least US$2.6 million and ZWL$10.4 million through unauthorized purchases, awarding himself hefty allowances that are outside his terms of employment, unilaterally awarding himself holiday stipends, including his personal domestic workers on the NetOne payroll, and leasing himself a deluxe company house in Harare’s leafy Borrowdale suburb for just a fraction of its market value, further prejudicing the company financially.

Muchenje is also being accused of awarding himself a disproportionate bonus of ZWL$510,000 in December 2019, whilst his monthly salary was pegged at ZWL$67,000.

This amount was way above the stipulated threshold for State-Owned Enterprises CEOs. The Board sought to bring him before a disciplinary hearing again.

According to the charge sheet, in November 2019, “Muchenje allegedly allocated himself and his wife ZWL$895,000 (USD36 000.00) as a holiday allowance although she was not eligible for it. In November 2019, you wrongfully and unlawfully paid to yourself the total sum of ZW$895 000 for air tickets, per diem, and entertainment allowance for you and your spouse in contravention of the terms of your contract of employment and without Board approval. You unlawfully encashed the sum of ZW$895 000 in lieu of your vacation holiday contrary to the express terms of your employment contract,” the charge sheet reads.

Furthermore, Muchenje has several criminal charges being levied against him, and he has been appearing with various co-accused on the matters which are currently before the courts.

Muchenje, working with former NetOne Acting Chief Finance Officer, Tinashe Severa also allegedly connived to potentially prejudice the company of US$2, 24 million and they unlawfully signed an Interconnect Agreement with Bankai International (Pvt) Ltd on 10 December 2019.

The Chief Executive Officer approved the initiation of the following international projects with Bankai at his discretion:

  • He entered into an International interconnect agreement called Unilateral Buy agreement with Bankai International on 12th December 2019 without the knowledge and approval of the NetOne Board of Directors and or the Ministry.
  • He also entered into an International interconnect agreement with Bankai in violation of the Statutory Instrument (SI) 163/2008 which sets the minimum permissible base price of USD 0.20 per minute for international traffic terminating into Zimbabwe. The accused authorized NetOne to be charged USD 0.13 per minute instead of the prevailing USD 0.36 currently being charged to other carriers providing exactly the same service to NetOne potentially prejudicing NetOne of USD $2, 070, 000.00.
  • Muchenje un-procedurally handpicked Bankai to offer the service to NetOne in violation of the Procurement Regulations set by PRAZ as appropriate tender procedures were not followed.
  • He further authorized the addition of two thousand mobile lines to be configured on the Nokia Mobile Switching Center (MSC) without Subscriber Identification Module (SIM) cards and subscriber details. This is in contradiction to POTRAZ requirements to register all subscriber details connected on the switch and distorts the national statistics of registered and connected subscribers. Furthermore, the contract entered therein is not covered by the POTRAZ licence, virtual lines are not covered and pose a national security risk in that the people using those lines cannot be tracked or traced in the event that they use those lines for illicit purposes.
  • Muchenje authorized the deployment of a Bankai device in NetOne equipment room at TelOne Main Exchange building in Harare without project management procedures in place, resulting in NetOne being exposed to cyber security and terrorism threats, as this matter has serious repercussions on national security.

Potraz has since fined NetOne a sum of US$3 588.52 as a penalty for Muchenje’s actions on the use of the wrong interconnection tariff.

Corruption

  • The Chief Executive Officer acting in connivance with former NetOne Board Member Mr. Paradzai M Chakona hatched a plan to defraud NetOne Cellular (Private) Limited. Pursuant to their plan; they entered into a defective Lease Agreement with P M. Chakona purporting to be representing NetOne Cellular (Pvt) Ltd. The Lease Agreement was for accommodation inclusive of furniture with a Monthly rental of ZWL$1000-00 despite the company having been advised by PAM Golding Properties and Kennan Properties that the rentals market for the property should range between US$2500-00 to US$3500-00 per month converted to ZWL$ in light of Exchange Control Directive.
  • During the period between May 2019 and January 2020, and contrary to his Contract of employment, the Chief Executive Officer went on to buy furniture and other household goods of his choice worth ZWL$923 587-00 using the company funds without Board of Directors’ approval.
  • He also contracted personal security (body guard) as well as placed his domestic workers on the company’s payroll, benefits which are not covered by his employment contract.
  • Muchenje is also accused of facilitating money laundering activities through the NetOne Bureau de Change.

In their quest to weed out and fight corruption and ensuring ethical conduct of all employees, the NetOne Board has worked closely with Zimbabwe Anti-Corruption Commission (ZACC) to identify and investigate corrupt practices, rooting out misconduct, and bringing wrongdoers to justice. When leaders in an organization resort to cheating the very members that they are supposed to represent, they must be held accountable.

The accused and their co-conspirators corrupted the enterprise by engaging in various criminal activities through abuse of office. The NetOne Board of Directors has been working flat out in exercising their oversight role and ensuring that appropriate corrective action has been taken and remains resolute to protect the Shareholder’s interest. This has resulted in the termination of the NetOne CEO – Lazarus Muchenje’s employment contract with immediate effect.

NetOne has withdrawn the labour case with the High Court relating to termination on notice, citing inefficiencies in the judicial system, given that Muchenje’s labour case ref HC 3611/2020 was heard as an urgent Court application by Justice Chinamora who has reserved judgement, and issued a preservation order from the 5th of August to date. Failure to bring this matter to finality, is similar to the proverbial “justice delayed is justice denied”, which may lead to both affected partied being prejudiced.

Muchenje’s position has been inconsistent depending on the Court he is appearing. This inconsistency is also seen by analyzing the Magistrate Court case where Muchenje is jointly charged with Former Board Member Paradzai Chakona on criminal abuse of office in contravention of section 174(1) (a) of the Criminal Law Codification and Reform Act 9:23 wherein the parties have pleaded not guilty citing that NetOne is a Private entity.

However, when one looks at the High court case ref 3611/2020, the same Muchenje is arguing that he is a Public Officer and that he must be dismissed in terms of the Public Entities and Corporate Governance Act created specifically to cater for the dismissal of CEOs and Board Members of public entities.

Given the prolonged finalization of the Labour matter presided over by Justice Chinamhora, which judgment has been reserved with no end in sight, the NetOne Board in consultation with its key Stakeholders has deemed it necessary to disengage with Lazarus Muchenje, through the immediate termination of his employment contract, in order to enable the business to move forward as it approached the new year 2021.

According to an Insider source, Muchenje has been peddling falsehoods to employees and other stakeholders. The option is well within the Board’s right as enshrined in the Corporate Governance and Public entities Act.

It is envisaged that this decisive and bold step will stabilize the ship and allow NetOne to focus on unlocking value for its various stakeholders

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