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Shareholders weigh in on Safaricom tender scam

Shareholders weigh in on Safaricom tender scam

By The Kenyan Weekly Team

Major business partners and shareholders are weighing in on recent corruption revelations at scandal-hit Safaricom even as it emerges that, against business ethics and Safaricom’s own code of ethics, some firms have been irregularly embedded as permanent suppliers at Safaricom.

The recently leaked KPMG report exposed extremely unethical conflicts of interest. What’s more, Safaricom’s own code of conduct has been repeatedly violated by the CEO Bob Collymore and some of his senior members of management, including Sylvia Mulinge, the Head of the Consumer Business Unit and the firm’s Head of Risk Nicholas Mulila, who have abused with impunity supplier hospitality standards and partaken in insider trading.

Safaricom senior management has involved itself in distasteful activities that have directly compromised Safaricom’s impartiality in the eyes of competing suppliers and its shareholders.

One case that stands out in Safaricom’s embedded corruption is that of Scanad and its flamboyant billionaire CEO one Bharat Thakrar.

Shocking revelations show that Scanad has been offering contractual services to Safaricom for nine years without being competitively awarded. To avoid audit queries, in April 2014 Scanad was irregularly awarded a contract by Safaricom with a monthly retainer of Sh18 million. The contract was to expire in April last year, as indicated in their award letter. To date, Scanad is still offering the same services to Safaricom, even after their contract expired and without any tender or procurement process. They are therefore operating illegally and unprocedurally.

According to the technical and commercial analysis done during the tendering process in January 2014 that led to Scanad being irregularly awarded the tender, Transcend media won the tender in all categories as noted in a KPMG report, which states: “Although Transcend Media was ranked first during the technical and commercial analysis, we observed that they were not selected”.

Consequently, despite not being ranked the best vendor, Scanad was still awarded a lucrative contract by Safaricom where it provides 76 resources to Safaricom monthly.

They are not based at Safaricom and not directly monitored by Safaricom personnel, a key observation made by KPMG.

It is not lost on observers that Bharat Thakrar of Scanad has developed a close relationship with Safaricom CEO Bob Collymore. The two have been seen in many informal social events together. Thakrar was among the guests Collymore invited for his lavish wedding in 2016.

It is strange that although six firms bidded for this contract, only Thakrar was present at the invites-only wedding while the rest of competing firms’ CEOs only read about the wedding in social media.

Nairobi Stock Exchange pundits and responsible Safaricom senior staff have quietly raised questions about the apparent ‘special’ relationship between Bob Collymore and Bharat Thakrar.

Does this preferred supplier status enjoyed by Scanad explain why Safaricom irregularly awarded a multi-million tender to Scanad without competitive bidding? Are the shareholders of Safaricom getting value for money out of Scanad? The only explanation that can be given is the corrupt relationship between Collymore and Bharat, who runs the corrupt ScanGroup that apparently hires only Indian foreigners in high positions and African in lower cadres. Most of the Indian foreigners are said not to possess legal papers to work in Kenya, a clear violation of the Kenyan law.

It was revealed earlier this year that senior Safaricom management, led by its Director of Consumer Business Unit one Sylvia Mulinge, and its Director of Risk Management, one Nicholas Mulila secretly consp ired to deny one company, Transcend Media Group, a contract which they won fairly after a competitive bidding process.

The tender was instead irregularly awarded to Saracen Media, who had bid with a creative agency called 5ive. Saracen eventually dropped 5ive and was awarded with Mulinge’s shell company called Fieldstone Helms. Our search at the company registry showed that Fieldstone Helms offices are located at Uganda House.

“We were shocked when we visited the premises only to find a beauty and massage parlour at the same address. Did Safaricom award a multi-million contract to a beauty and massage parlour?” poses KPMG.

Further interrogation shows that Fieldstone Helms has neither requisite experience nor the expertise for similar contracts. Furthermore, Fieldstone Helms had never prequalified as a Safaricom supplier and did not even bid for the tender that they were awarded.

It has since been confirmed that Sylvia Mulinge single-sourced Saracen after the Scanad business was split and an agreement reached to use Saracen Media for a fee and as front to engage a third party to execute the contract. Saracen Media engaged Mulinge’s shell company, Fieldstones Hems Ltd to provide the services. Mulinge also leaked to them Transcend Media’s technical presentation and then went further to compromise and secretly pay off Transcend Media staff to undertake the contract on their behalf using intellectual property stolen from a disenfranchised competitor.

The shameful and unlawful insider trading by both Mulinge and Mulila and their associates underlines the circle of corruption and cycle of insatiable greed at Safaricom.

This is a group of white-collar criminals who have essentially formed a sophisticated club whose purpose was illegal profiteering from Safaricom’s shareholder revenues; and whose members regularly barter lucrative insider information to the detriment of other stakeholders.

As suppliers who practice fair trade count losses, Kenyan and British law enforcement officials and anti-corruption agencies are expected to move into Safaricom to probe these allegations. The Kenyan legislature is also considering a petition before it submitted by a concerned shareholder/member of the public concerned with the long-term effects of endemic corruption at Safaricom.

 

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Written by Lucy Nyasuna

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