Vodacom has dismissed allegations that it secured contracts in the Free State in an untoward manner as false and baseless.
The Daily Maverick published an article on 15 April alleging Vodacom secured contracts in the Free State through a questionable partnership.
“A closely guarded internal Vodacom investigation has flagged a questionable partnership deal between Vodacom and a Free State businessman linked to former premier Ace Magashule,” the report said.
The Daily Maverick added that Vodacom has reported the matter to the Zondo Commission but would not provide further details.
It said the deals with the Free State government “could land some of Vodacom’s top current and former executives, including CEO Shameel Joosub, in hot water”.
Read the report on the matter here: Vodacom in Ace Magashule-linked Free State Contracts Scandal.
A Vodacom spokesperson told MyBroadband the allegations are false and baseless, adding that they were disappointed with the report.
Vodacom’s full response to the Daily Maverick article is provided below.
Vodacom is aware of a Daily Maverick article that claims Vodacom secured the award of Provincial and / or National government contracts in an untoward manner. Vodacom rejects the allegations as false and baseless. We were both disappointed and surprised that despite Vodacom providing the journalist with facts – such as the timing of certain meetings – these have been incorrectly represented.
In the normal course of business, Vodacom executives will attend meetings as part of our stakeholder engagement programme. This programme incorporates the Premiers of South Africa’s nine provinces and included “Ace” Magashule, during his tenure as Premier of Free State province from 2009 to 2018.
In 2014, Vodacom and other companies were called to a forum that included Free State MECs, DGs and CIOs regarding a claim that companies had been slow to transform in the province. During this meeting, Vodacom outlined past, current and future initiatives aimed at driving transformation not just in the province but also at a national level.
As a common courtesy, Vodacom sent a letter to the Premier’s office following this meeting in which we documented past, current and future initiatives that were discussed in the meeting. This includes confirmation that Vodacom planned to increase its investment in network infrastructure in the Free State region to R569 million. It is patently false that Vodacom was planning to “nearly double its expenditure on goods and services from local companies in Magashule’s backyard” as the article claims. It is clear in the letter that network infrastructure equipment is imported as there are no local manufacturers.
In appointing suppliers and selecting business partners, Vodacom considers a variety of factors including: scope of requirements, skills required, historical performances, health and safety comliance, commercial proposition, availability of alternative suppliers/products and BBBEE credentials. Our commitment to BBBEE has resulted in Vodacom South Africa achieving a Level 1 BBBEE status.
For instance, in our most recent year of BBBEE certification, Vodacom spent R3 billion on Qualifying Small Entities, R1.2 billion on Emerging Micro Entities, R10.7 billion on Black Owned Entities and R10.1 billion on Black Women owned entities. In line with Vodacom’s strict procurement policy and procedures, the Group CEO does not get involved in the appointment of suppliers.
It is therefore grossly incorrect to claim that Mr Joosub was in any way involved in appointing suppliers named in the article. To be clear: Mr Joosub has never discussed any suppliers with Mr Magashule, neither has Mr Magashule pushed Vodacom to use certain suppliers.
It is common knowledge that in October 2017 the Competition Commission announced an investigation into the RT15-2016 tender award, which is yet to be finalised. Vodacom has cooperated fully with this investigation.
We are confident that the tender was deservedly awarded to us in a fiercely contested, and yet fair and transparent, bidding process.
The RT15-2016 tender process was initiated and led by National Treasury through its procurement office with the award based on various elements including cost savings, quality of service, security, coverage, support and billing, quality of network and technology innovation.
As a company committed to doing business ethically, Vodacom will regularly conduct due diligences, as a matter of course, on our numerous business processes and contractual terms. Following a thorough internal investigation, which included specialist external parties, the due diligence done on the RT15-2016 tender process found nothing untoward.
Vodacom can confirm that it has provided information to the Zondo Commission (“the Commission”) at the behest of the Commission. Vodacom does not want to interfere with the Commission’s work; neither do we believe that it is appropriate to comment on this aspect while the Commission’s inquiry is in progress.