28 December 2017

His Excellency Cde. E.D.Mnangagwa, President of the

Republic of Zimbabwe

The Birth and Growth of a cartel in the ICT sector in

Zimbabwe.

1.0 Introduction:

Mid – December 2014, saw the appointment of Hon.

Supa Mandiwanzira as the Minister of Information
Communication Technologies, Postal & Courier
Services, replacing Hon. Webster K. Shamu. This event
marked the birth of a cartel in the ICT sector in
Zimbabwe as will be fully explained below.

2.0 NetOne ‘re-structuring exercise’.

As early as 30 December 2014, out of the blues, the

former Chairman of the Board, Mr Alex Marufu
indicated in a text message to me that he was going to
destroy empires in NetOne. Soon afterwards, there
began the talk of re-structuring of NetOne
management. There was no basis given for that re-
structuring exercise. I was invited to arrange for a
lunch with the Minister, Hon. Supa Mandiwanzira at the
Meikles Hotel, where he wanted to know why I was
against the appointment of Francis Mawindi, former
CEO of Telecel, as NetOne Chief Operating Officer
(COO) and I gave him my reasons on the basis of his
involvement with NetOne’s Easycall prepaid platform
under Brightpoint, a company that the late General
Mujuru had interests and had supplied NetOne with a
mal-functioning prepaid platform that cost NetOne loss
of customers during the 1998-1999 period and his exit

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from PTC. I was later vindicated as he was unsuccessful
during the vetting exercise by Government.

During the same lunch, the Minister assured me of my

position as CEO of NetOne but he wanted to bring
management capacity in the Company. Events that
later unfolded suggest that the re-structuring exercise
at NetOne was meant to supplant management with his
proxies.

Indeed, during that re-structuring exercise, Mrs

Sibusisiwe Ndhlovu, formerly Executive Director for
Retail banking at MetBank, was appointed Chief
Finance Officer at NetOne, replacing Mr Godfrey
Tarupuwa, who was the Company’s Finance Director.
Mrs Sibusisiwe Ndhlovu had been forced to resign from
MetBank, following a forensic audit at Afre Holding
(the Pattisson Timba saga at Renaissance Bank)
sanctioned by the Reserve Bank of Zimbabwe, found
her unsuitable to hold public office.

Following the unsuccessful security clearance of

Francis Mawindi for the post of COO at NetOne, Mr
Brian Mutandiro was later appointed COO of NetOne,
when in fact, he didn’t meet the qualifications called for
in the job advert. Details pertaining to that
appointment were given to the Zimbabwe Anti-
Corruption Commission (ZACC), Commissioner of
Investigations, Mr Goodson Nguni on the 14th March
2016. Mr Brian Mutandiro is related to Hon. Supa
Mandiwanzira and has been acting CEO of NetOne,
since 14th March 2016.

Incidentally, some of the reasons advanced for the

failure to security clear Mr Francis Mawindi, relate to
his tenure as Telecel CEO. He deposited large sums of
Telecel funds into MetBank without the authority of the

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Board. Telecel was later unable to withdraw the money
to meet its licence obligations with POTRAZ, resulting
in the cancellation of its licence. Mr Mawindi is closely
related to one of the owners of MetBank, hence the
motivation to deposit Telecel funds into the Bank, even
without the authorisation of the Board of Directors of
the Company.

Mr Kudakwashe Nyashanu was appointed Executive

Human Resources at NetOne. Mr Nyashanu was
previously employed at Tarcon, a company in which
Hon. Mandiwanzira has an interest.

The CEO, Reward Kangai, was later dismissed,

following a forensic audit, which audit found no
evidence of allegations that had been laid against him
by Hon. Supa Mandiwanzira and former Board
Chairman, Mr Alex Marufu.

Mr Darlington Gutu was retained as Chief Technical

Officer. Sources from NetOne indicate that he was
assured of being retained in his position, if he came up
with incriminating evidence against the former CEO,
Reward Kangai during the forensic audit. Indeed, he
was a false witness to the forensic auditors as he
wrongfully indicated that Reward Kangai had changed
sites for base stations, failed to develop base stations
etc., which allegations were not supported by facts.

At Board level, the Minister fired 3 Board members at

the end of July 2016, namely Mrs Thandiwe Mlobane,
Mrs Dorothy Mapimhidze and Mr Shepherd Tsomondo
following the submission of the Preliminary forensic
audit report, which audit had found no evidence of
wrong-doing on the part of NetOne management. This
did not go down well with the Minister. The fired Board
members were key in the forensic audit process. The

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 fired Board members were immediately replaced by
members close to Hon. Supa Mandiwanzira. One of
them, Mr Peter Chingoka, is a non-executive director at
MetBank and was to be later appointed Chairman of
NetOne after Mr Alex Marufu was forced to resign in
December 2016. Mr Alex Marufu, despite being Hon.
Supa Mandiwanzira’s hatchet man, had to resign as
there was increasing pressure on the minister, as Mr
Marufu had re-located to South Africa, whilst NetOne
was being forced to pay for his travel costs to attend
the unusually frequent NetOne Board meetings.
Furthermore, he had, with the approval of the Minister,
been granted security guards at his Harare home at
NetOne’s cost. This matter of Abuse of Office by Mr Alex
Marufu was raised with the Chief Secretary to the
Office of the President and Cabinet on the 9th December
2016. A copy of the document was presented to ZACC
Commissioner for Investigations, Mr Goodson Nguni on
the 9th December 2016.

With the above appointments at Board and

Management, NetOne, a State Owned Entity (SOE) has
clearly been captured by Hon. Supa Mandiwanzira. The
Chairman of the Board, CEO, CFO and Executive Human
Resources are all linked to Hon. Supa Mandiwanzira, as
will be further expounded.

3.0 The MetBank connection

As has been explained earlier, the Chairman of NetOne,

Mr Peter Chingoka is a non-executive Director at
MetBank. Mrs Sibusisiwe Ndhlovu, Chief Financial
Officer at NetOne is formerly a Director at MetBank.
Mr Ozias Bvute, the CEO of MetBank, was appointed
Chairman of POTRAZ by the Minister, Hon. Supa
Mandiwanzira in April 2016. Brian Mutandiro had
previously been appointed by the same Minister to that

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non-Executive directorship position at POTRAZ but
resigned to take up a more lucrative Executive
directorship position at NetOne.

The appointment of Mr Ozias Bvute to POTRAZ by Hon.

Supa Mandiwanzira was made with the Minister’s full
knowledge that at the time, MetBank owed POTRAZ,
US$6.5 million, NetOne US$300 000 (the amount was
US$700 000 but was reduced after NetOne CEO,
Reward Kangai took legal action against MetBank, a
move that didn’t go down well with both Minister
Mandiwanzira and Ozias Bvute), Communications and
Allied Industries Pension Fund (CAIPF) US$1.6million,
POSB, US$2million and Zimpost (exact amount
unknown). The above entities except POSB and CAIPF
are regulated by POTRAZ. Now, POTRAZ administers
the Universal Services Fund (USF), a fund that was
created by the Postal and Telecommunications Services
Act, Chapter 12:05 for the purposes of developing
postal and telecommunication services in under-
serviced areas that may not be commercially viable for
operators to invest in such areas on their own.

Soon after his appointment to the Chairmanship of the

POTRAZ Board, Mr Ozias Bvute re-instated the Acting
Director General to his position as Deputy Director,
who had previously been fired by the Ishmael
Chikwenhere’s Board for violating a Board resolution,
which had authorised POTRAZ to open an account with
MetBank but to limit deposits to a maximum of US$500
000. Mr Bvute went on to direct POTRAZ management
to purchase stands at Crowhill, Harare using funds
from the USF at US$22.5million, less the US$6.5million
already deposited with MetBank, notwithstanding that
the intended move was clearly not in line with the
mandate of POTRAZ and certainly not in accordance
with the intended use of the USF. In an article entitled

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“Zimdef loses millions in stands scandal”, the Herald
in its 20th December 2017 publication, highlights
details of how Zimdef lost millions of dollars in a debt-
land swap deal, where the value of the stands from the
same Crowhill area where grossly overvalued.

Clearly, the appointment of Ozias Bvute to the position

of Chairman of POTRAZ, was intended for the purpose
of looting State funds for the benefit of a cabal, with the
Minister, Hon. Supa Mandiwanzira at the centre of it.

The appointment at POTRAZ which administers the

cash rich USF, was tantamount to setting a hyena to
look after sheep, as MetBank, a bank that is managed
by Mr Bvute, had lost millions of US dollars of
depositors’ (largely SOEs and parastatals) monies.
Through his connections with powerful ministers, Mr
Bvute would coerce CEOs of SOEs and parastatals to
open accounts with MetBank and deposit large
amounts of cash into MetBank, which monies the
institutions would not be able to withdraw. It is
rumoured that the Central Intelligence Organisation,
CIO had not cleared Mr Bvute’s appointment for the
POTRAZ Board Chairmanship but was over-ruled by
the Office of the President & Cabinet on instructions
from the former First Lady.

Under the POTRAZ Chairmanship of Mr Ozias Bvute,

US$10 million of funds from USF were used as part-
payment of 60% share-holding in Telecel, a privately
owned mobile telecommunications operator. The
remaining $30million came from NSSA. NSSA insisted
on having a shareholding in Telecel after that payment
but Hon. Supa Mandiwanzira is against that, hence
NSSA is being re-imbursed for its US$30million
through the USF. The Government’s purchase of
Telecel, a move that was initiated by Hon. Supa

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Mandiwanzira, against a background wherein
Government of Zimbabwe already owns 100%
shareholding in NetOne and have over the years, failed
to adequately capitalise the company, cannot possibly
be in the interest of the Government of Zimbabwe and
its citizens. World-wide, most Governments have been
dis-investing from the highly capital intensive mobile
communications business as the industry is very
attractive to Foreign Direct Investment (FDI), leaving
Governments to focus funding on social services like
health and education, which are not so attractive to
FDI. It is unlikely that the Minister would have been
unaware of the folly of that move but rather, it seems to
support speculations that the purchase of Telecel by
the Government of Zimbabwe, was only an
intermediate step with the ultimate goal of benefitting
powerful and well connected individuals. There have
been wide rumours that the true intention was to later
sell Telecel to Unitel, owned by Isabel dos Santos,
daughter of former Angolan President, Eduardo dos
Santos for a mere US$10million ‘profit’ meant to
whoodwink the public whilst facilitating proxy
shareholding to former First Lady and the Minister.
This is the only plausible explanation that makes sense
in the acquisition of Telecel by Government of
Zimbabwe. Already, Telecel has suffered a significant
drop in both market share and revenue, since its
acquisition by Government, clearly confirming a well
known view of Government’s inability to run business,
particularly such a highly capital intensive industry like
mobile communications. Should Government sell
Telecel to a privately owned International mobile
operator, NetOne will ultimately flounder, as
Government bureaucracy and corruption continue to
weigh down heavily on the company. The combined
revenue of both Government owned mobile operators,
is less than 20% market share, whilst Econet rakes in

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85% lion share of the market, as shown by the year
2017, 3rd Quarterly statistics recently published by
POTRAZ! NetOne registered the lowest Average
Revenue Per User (ARPU), a reflection of the dismal
failure of the current management. Yet, the new
management under Mr Brian Mutandiro inherited in
2016, a network that had registered an all-time record
high number of Greenfield base stations of 148 that
were installed in 2015 under the previous
management led by the writer. Revenue for year 2016
under Mr Brian Mutandiro only increased by US$1
million, notwithstanding the high number of base
stations installed the previous year and the capital
investment of US$218 million made during the
previous year under my management.

It is rumoured that the Minister, Hon. Supa

Mandiwanzira, transferred a US$25 million debt from
CBZ Bank to MetBank. Due to bank – client
confidentiality, the writer is not in a position to verify
this. That verification is best dealt with by Government
investigators like the National Economic Conduct
Inspectorate (NECI). Should this turn out to be true, it
would explain the Minister’s appointments of MetBank
directors at POTRAZ and NetOne, to corruptly facilitate
the Minister’s debt clearance at MetBank. The reported
inflating of the Crowhill stands, seems to be the way
State-Owned Enterprises and parastatals have been
used by MetBank to prejudice those institutions of
millions of State funds. At the time of writing this
document, TelOne management was being pressured
by the Minister to open an account with MetBank and
deposit its funds with that bank. From the experiences
of many SOEs, TelOne will not be able to withdraw its
funds from that bottomless pit of a Bank and will likely
be offered a land swap deal in the notorious Crowhill
stands, whose value will have been grossly inflated.

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TelOne management is very vulnerable to such kind of
pressures at this moment as there is no Board of
Directors and the Managing Director’s contract of
employment has deliberately not been extended,
almost a year after expiry.

It is common cause that POTRAZ, NetOne and Zimposts

were coerced into opening accounts with MetBank and
depositing their cash collections with that bank. The
former POTRAZ Director General, Eng. Charles M.
Sibanda objected to depositing POTRAZ funds with
MetBank, resulting in his contract of employment not
being renewed.

It is also pertinent to point out that Tarcon, a Company

in which Minister Mandiwanzira has an interest, is
contracted to service the Crowhill stands. Thus,
Minister Mandiwanzira is a beneficiary of the abuse of
SOE funds deposited with MetBank.

It is also interesting to note that the Chairman of

MetBank, Mr W. Manase is the lawyer representing the
former First Lady on the matter relating to the US$1.35
million diamond ring saga.

Mr W. Manase also represents Bacnet Trading, a

Company that was sued by NetOne, along with the
Minister of Local Government and National Housing in
a dispute wherein the Minister of Local Government
was attempting to take some 131 000 hectares of
NetOne land at Cleveland, granted under Deed of Grant
Registered on the 10th September 1953 (Registration
No. 13832) and later under Consent No. 4717/75 on
3/12/1975. Case No. HC 10812/13 of 17 December
2013 refers. The case involves the illegal sub-division
of Lot A of Chikurubi private land belonging to NetOne
into residential stands, which was done on the

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 instructions of former Local Government and Housing
Minister, Ignatius Chombo. Some of the stands went on
to be sold for US$60 000 and when the purchasers
failed to get title deeds, they reported the matter to the
police. When I was forced out of NetOne in March 2016,
the case was pending at the Supreme Court, after
NetOne had won at the High Court but the respondents
appealed at the Supreme Court. The sub-division of the
land on Lot A of Chikurubi, is against the conditions set
out in the Deed of Grant. A Mr Charles Chombo of
Bacnet Trading, was to be the beneficiary of the land
that was to be usurped from NetOne through abuse of
office by then Minister of Local Government and
National Housing.

4.0 TelOne

After supplanting NetOne management, the Minister,

Hon. Supa Mandiwanzira’s next victim was to be
TelOne Managing Director, Mrs Chipo Mtasa and
Finance Director, Mrs Ellen Chivaviro. Hon. Supa
Mandiwanzira, in a move that bears striking
resemblance to what he did at NetOne and has become
his hallmark, orchestrated the publication of an article
entitled “TelOne reels under a US$378 million debt”
in the Zimbabwe Independent newspaper of 24 th
December 2016. The objective behind the article was a
smear campaign against the TelOne Managing Director
and Finance Director to justify non-renewal of their
Contracts of Employment, as the Minister had so
directed the Board. In much the same way, NetOne
management was wrongly blamed by the Minister and
former Board Chairman, of “siphoning US$11 million
of NetOne funds through Firstel”, the article wrongly
blamed TelOne management for the US$378 million
TelOne debt and yet almost US$300 million of that, was
legacy debt incurred by the former Posts and

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 Telecommunications Corporation (PTC) during the
1980s, 90s time-frame, well before both the current
Board and management joined TelOne. Mrs Ellen
Chivaviro employment contract was not renewed and
the Managing Director, Mrs Chipo Mtasa has been
working without a contract for almost a year. It is
known that Hon. Supa Mandiwanzira intends to replace
them with his proxies and thus complete the capture of
the Regulatory body, POTRAZ and SOEs in the ICT
sector in Zimbabwe.

5.0 Recommendation:

It is recommended that the Government of Zimbabwe

urgently undertakes the following:
• Dissolve the Board of Directors of NetOne
• Sending NetOne key management on forced leave,
pending the outcome of investigations by a
Commission of Inquiry. These are the Acting CEO,
Brian Mutandiro, CFO, Mrs Sibusisiwe Ndhlovu,
CTO, Mr Darlington Gutu and Executive Human
Resources, Mr Kudakwashe Nyashanu.
• Setting up a Commission of Inquiry into the
operations of NetOne, covering the re-structuring
exercise carried out in 2015, alleged payments of
US$10 000 a week to Hon. Supa Mandiwanzira
and the appointment of Megawatt Energy by the
Minister for a consultancy fee of US$4million and
whether the Minister was not conflicted and the
alleged bribing of the Minister by ZTE, a company
that is linked to Mr Li Xiaodong of Megawatt
Energy. It is also alleged that similar payments are
being done by TelOne to the Minister. The
parcelling of advertising jobs to VPCG, after losing
to Jericho. Hon. Supa Mandiwanzira is reportedly
linked to the CEO of VPCG, Mr Reg Makuchete. The

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 Commission of Inquiry to investigate the whole
ICT sector, POTRAZ, TelOne, NetOne and Telecel.
• An interim Board for NetOne comprising Ministry
officials be set up under the Chairmanship of the
Permanent Secretary, Dr Eng. Sam Kundishora.
• Mr Ozias Bvute to be suspended as Chairman of
POTRAZ to clear the way for those investigations.
• Government to also investigate the eficacy of its
acquisition of Telecel and the use of funds from
the USF, including whether or not, there was a
violation of the Postal and Telecommunications
Act, Chapter 12:05 by the POTRAZ and the
Minister.
• The abuse of the USF in purchasing vehicles for
the Minister and loans being advanced to bodies
like ZIFA, clearly not intended for the purpose for
which USF was established.

Yours faithfully,

Reward Kangai, CEng, MIET.

Mobile: +263712800026
WhatsAp: +27640509501

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