Neotel CFO quits after Homix scandal

Neotel offices in Midrand in Gauteng. Photo: Leon Nicholas.

Neotel offices in Midrand in Gauteng. Photo: Leon Nicholas.

Published Nov 27, 2015

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Johannesburg - Neotel says its CFO has stepped down from the board with effect from Monday following his placement on leave while it investigated the Homix scandal.

Neotel, however, has not accused Steven Whiley of any wrongdoing, noting instead that he “at all times acted with integrity”.

The operator, SA’s second fixed-line company, is currently being bought out by Vodacom in a R7 billion deal.

It explains Whiley was placed on leave while it was conducting a probe into certain transactions involving Neotel and Homix. It did not specify what these deals were, nor when Whiley was placed on leave.

However, in July, the Mail & Guardian unveiled that Neotel paid R66 million in commissions, which it says were seemingly kickbacks, to Homix to secure contracts from Transnet. A further R25 million was agreed but not yet paid.

The paper added in August: “Homix is little more than a letterbox; an apparent front for persons undeclared. A former senior Gupta employee has been linked to Homix, but the politically well-connected family has distanced itself from him and denied having a relationship with the company.”

The M&G also noted that Neotel probed the payments after its auditors altered it to the issue in April.

Neotel’s board commissioned an investigation into the payments after the company’s auditors blew the whistle to it in April. In August, its CEO and CFO took special leave, it reported.

“The known Neotel payments to Homix were to clinch Transnet’s purchase of R300 million in telecommunication network equipment from Neotel and a five-year, R1.8 billion agreement for Neotel to provide Transnet with network services.

“Now it has emerged that Transnet has awarded two more large projects – closed-circuit television (CCTV) systems worth R835-million – to Neotel without tender and while Neotel was interacting with Homix.

“The first project, or “phase one”, was worth more than R329-million, according to a Transnet memorandum seen by amaBhungane. It entailed installing and maintaining CCTV networks at six ports controlled by Transnet,” reported the paper.

Neotel now says, “as a result of the lengthy duration of the investigation, Whiley has decided to pursue his own interests, and will resign from Neotel”.

The company adds “Whiley complied with this process, cooperated therewith and fully supported the board of Neotel, for which the board is most grateful. With the information currently at its disposal the board is satisfied that Steven Whiley has at all times acted with integrity”.

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