Dodgy fibre dealings leave South Africans without Internet

A virtual network operator has said that its dealings with venture capital firm Enable Capital resulted in the non-payment of over R250,000, leading to service disruptions to users in underprivileged areas.

News24 recently reported that the Public Investment Corporation (PIC) laid criminal charges against Enable Capital and its directors for fraud amounting to R500 million.

Following this news, the owner of Smart Africa, a wholesale Internet service provider, contacted MyBroadband.

He explained that he had been involved in a fibre project with Enable Capital’s directors, leaving them R264,000 out of pocket.

Smart Africa had been contacted by Isibindi Solutions to monetise fibre infrastructure in Katlehong, a township in Johannesburg.

However, Smart Africa told MyBroadband that the infrastructure was actually owned by Enable Capital.

Enable Capital is a funder of small, medium, and micro-enterprises that “provides suppliers with a fast and efficient cash flow solution.”

It does so by buying purchase orders from suppliers at a discounted price, allowing them to access the funds before the contract stipulates.

A glance at their website raises several red flags. It is filled with stock images, has very little information about the business, and the faces that appear under testimonials often feature on over fifty other sites across the web.

Smart Africa’s owner said Enable Capital failed to conduct its due diligence when entering the fibre space and acquiring the network in Katlehong, meaning it could not cash in on the purchase orders with the buyers.

This was when Isibindi Solutions contacted them to use his systems to generate revenue from this network. In May 2024, the parties negotiated a five-year deal.

Smart Africa said its systems effectively create the necessary framework for an open access network on top of existing dark fibre, which end-user ISPs can then plug into.

Therefore, Isibindi Solutions needed an ISP, so its directors created a new company called Blaze Fibre.

“The arrangement stipulated that Isibindi Solutions would own the fibre network infrastructure, while Blaze Fibre would operate as the ISP,” Smart Africa said.

“To facilitate operations, Blaze Fibre engaged Smart Africa’s vISP and vFNO systems.”

The Companies and Intellectual Property Commission’s (CIPC) database shows that the director of Enable Capital, Isibindi Solutions, and Blaze Fibre is currently the same person.

He was contacted for comment but did not respond by publication.

Red flags

Smart Africa’s owner said the first month’s payments were made on time. However, concerning signs started appearing after that.

“It soon became evident that Blaze Fibre’s appointed team lacked the necessary expertise to manage ISP operations effectively,” he told MyBroadband.

“Blaze Fibre’s incompetence led to defaults on payments to suppliers, resulting in service suspensions.”

Around this time, a newly appointed manager at Blaze Fibre tried to involve themselves in Smart Africa’s network operations.

“He came in and tried to tell us how to do our job,” a former Smart Africa employee told MyBroadband.

According to Smart Africa, this Isibindi employee’s arrival caused a power struggle in the Enable Capital-linked business.

Isibindi soon acquired another network, this time in Lichtenburg, a town in the North West province. Smart Africa took on this network in August.

With the power struggle within Isibindi continuing, it quickly became apparent that something was up when Smart Africa realised the network in Lichtenburg had been sabotaged.

At first, the three-week outage was blamed on power outages in the area, but Smart Africa was soon made aware that the power had been purposefully disconnected.

To determine what was going on, Smart Africa’s owner contacted the person in Isibindi who had been his initial contact, only to find out that this person had been removed from the company.

He then demanded payment from Blaze Fibre’s director, which is when “he asked us for our banking details,” he said.

“Despite our efforts to support them over six months, we were compelled to suspend services on December 12, 2024,” he said.

According to the CIPC, Isibindi Solutions has now been placed in business rescue, and its assets have been transferred to Best Fibre, a company with the same director as the other three companies.

Enable Capital Receivable Finance, another business listed under the same director, was also placed into business rescue at the same time as Isibindi, two months after receiving a R100 million investment from the Public Investment Corporation.

Both entities have the same business rescue practitioner.