Hisham Hendi, managing director of Vodacom Tanzania and other telecom executives, are facing charges of economic crimes, Reuters Africa reported.
Egyptian Hisham Hendi and other telecom executives “intentionally and wilfully organized a criminal racket, which caused the government … to suffer a pecuniary loss” of more than 5.9 billion Tanzanian shillings ($2.55 million), the documents said.
They were not allowed to enter a plea nor apply for bail, and were held in police custody until the case comes up on April 17, a court official said.
Vodacom, a subsidiary of South Africa’s Vodacom Group, is Tanzania’s leading telecom company by the number of mobile subscribers, with about 32 percent of the country’s 40 million mobile subscribers, ahead of Tigo Tanzania, a subsidiary of Sweden’s Millicom, and a local unit of India’s Bharti Airtel.
Vodacom said Tanzania police questioned Hisham Hendi and several other employees over the alleged fraudulent use of network facilities.
“Vodacom Tanzania can confirm that it is fully cooperating with an investigation led by the Tanzania Police Force,” Vodacom Tanzania said in a statement.
Hendi was appointed as managing director last month after serving as acting chief executive since September 2018. The government denied a work permit to the company’s first choice for chief executive, a Kenyan, it said at the time.
After taking office in 2015, President John Magufuli launched an anti-corruption drive and vowed to stamp out tax evasion by multinational companies in Tanzania’s mining and telecoms sectors.
In 2016, Magufuli’s government demanded that telecom companies list at least 25 percent of their shares on the local stock exchange.
Vodacom is the only telecom firm to have listed. It raised $213 million in the initial public offering, Tanzania’s largest ever, which attracted more than 40,000 local investors, most of whom were first-time participants in the country’s stock market.
In June, prosecutors charged chief executives of telecoms operators Halotel Tanzania, owned by Vietnam-based Viettel, and Zantel with fraudulent use of network facility. The executives were later released after paying a fine.
