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How Airtel Downfall Has Been Orchestrated By Poor HR Practices, Fraudulent Financial Reporting

Airtel Kenya [Photo/Courtesy]

Airtel Kenya could be on its path to downfall if poor Human Resource practices and fraudulent financial reporting, Kahawa Tungu can reveal.

According to snippets of weekly sales reports dating as early as 2016 in our possession, some of the telco’s employees misrepresent sales in order to hit targets and get high commissions or be promoted.

In one instance in a sales report of November 2016, Gedeon Obiero sold a multi-protocol label switching link with dedicated internet for Ksh7.2 million to Busia county.

However, according to a sale report in our possession, the sale was listed under a channel partner and a commission of Ksh700,000 paid. Channel Partners are managed by the Head of Regions and Channel Partners. Gedion Obiero made this sale when he was a key account manager (KAM) under Head of SME and Public Sector Michael Mbithuka.

Source: Airtel weekly sales report

The same transaction was also reported under Hubtech, a channel partner in 2018. The channel partner was paid a commission of about Ksh700,000 around May 2018.

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The channel partners were recruited way after the Busia sale was booked by Gedeon Obiero, then a KAM reporting to Michael Mbithuka.

It is interesting how a sale under public sector was fraudulently moved to a channel partner who was recruited later after the sale had been closed. The sale was closed in November 2016 while channel partners were recruited and on-boarded in 2017. All this happened on verbal instructions from the enterprise director Bernard Muteti.

Source: Airtel Channel Partner Commissions file

The telco was also accused of fraudulently billing the Kenya Pipeline Company and Kenya Prisons, in a bid to help the enterprise director Mr Muteti reach his target.

Kenya Pipeline Company was billed Ksh12.6 million while Kenya Prisons was billed Ksh3 million. The two have since become bad debts.

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“For Fixed data to be billed, there must be Certificate of Completion and Contract in place. These two are missing for Kenya Pipeline and Kenya Prisons. Further, these customers were billed for a whole year. The invoices were never dispatched to the customers as there are no existing contracts, nor Certificate of Completion. This is against International Accounting Standards on Revenue Recognition (IAS 18),” says an inside source.

In January 2019, Peris Wandeto, a KAM sold 27 lines to British Army. British Army requested each line to have a credit limit of Ksh10,000. The Enterprise director directed the order management team to book the sale for the 27 lines but with a projected monthly revenue of Ksh30,389.

The Monthly revenue booked for other lines is usually Ksh2,000. Instead of booking Ksh54,000 as the revenue from these lines, Airtel booked Ksh820,429. To date, these lines bill very little amounts, if any.

The purpose of this overbooking was to overstate the performance of Ms Peris with the primary reason to improve her standing hence increasing her chances of being given the role for Head of Corporate.

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The overbooking was also meant to overstate performance of the Enterprise Director so that he meets his key revenue targets/agreements and gets paid bonus. The company loses since he is paid bonus yet this revenue has not come through.

Source: Airtel weekly sales report

In February 2019, AU agreed in principle to buy devices from Airtel worth Ksh8.3 million, but contract was not signed immediately.

The enterprise director directed that this be booked as a sale in the sales report without having a contract in place to supply and/or when the risks and rewards have been transferred. To date, the devices have never been delivered and the ‘sale’ has become a bad debt.

Again, the ‘sale’ was meant to overstate the performance of Ms Peris with the primary reason to show her improved standing hence increasing her chances of being given the role for Head of Corporate Sales.

Read: Safaricom, Airtel, Telkom, CA Sued Over Data Expiry

It was also meant to overstate the performance of the enterprise director Mr Muteti so that he meets his target and gets paid bonus. Just like in other cases, the company lost since he was paid bonus yet this revenue did not come through.

Source: Airtel Fixed Data Aging Report

A part from the fraudulent financial reporting, the Mr Muteti is accused of showing favour to specific employees in his team and to the chagrin of the other employees.

“This has affected the performance of the whole team. It is evident that the director has been left run the department as his own. Anyone who has shown independence of mind in the team has either been fired (Francis Mbugua, Elizabeth Njama) or frustrated to leave (Michael Mbithuka, Lucy Kuria, Michael Owino, Imelda Ngunzu and Geeta Pandya) or is still in the team but frustrated without an option. Airtel has been on the receiving end as it has been losing very good talents,” says our inside source.

Read: CA Suspends Airtel-Telkom Merger Over Graft Allegations

Peris Wandeto, current head of corporate sales joined Enterprise Department in 2016 as a Business Development Manager, reporting to the Head of SME and Public Sector. She was supposed to bring new monthly sales against a set target. Since she joined her performance was below 30 percent month on month. Some months she even clocked zero.

However, Peris has never been put on Performance Improvement Programme (PiP) even once, despite her dismal performance. Worse still towards end of 2018, the Enterprise Director fraudulently directed her numbers for the months of January and Feb 2019 be overstated so that He can build her case for the quest for the vacant head of corporate sales.

“If the two above were true representation of facts, Peris would have been paid maximum commissions for these two months as she had met her targets. In fact, she has never been paid commission ever since she joined the department as she has never earned the same,” says a source.

Another one, Gertrude Langat, current business development manager – public sector ,is less than three years in the organization but the highest paid in the department. According to inside sources, she is paid more than her boss, despite having no sales experience at all.

She joined as an executive and was promoted to the role of commercial manager within a record Six months. She has since been promoted and is getting high salary increment annually. The Enterprise Director moved her to sales over a year ago.

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“Her performance has since been dismal. She has never been put on PiP. Her targets have at some points been adjusted downwards so that she looks like she is performing. Other people in sales have been put on PiP but her name has been conveniently removed by the enterprise director,” adds our source.

Recently, the position of Commercial Manager fell vacant while Gertrude was on long maternity leave. The position remained vacant and was advertised while Gertrude was just about to resume. Further, the Enterprise Director encouraged her to apply by sending her the job description of the role so that she applies.

The role has not been filled yet as the applicants were not shortlisted and she is currently performing some duties for the role. It is the game plan of the Enterprise Director to have Gertrude confirmed for that role as soon as possible.

Read: Ksh68.09 Billion Accumulated Loss Threatens To Bring Down Airtel Kenya

Bonface Ngeno, one of the department’s successful employees, was credited with bringing the most fixed data sales two years ago. It was later discovered that most of these sales were fictitious. A good example is the controversial 192 Link sales to the Kenya Prisons, which Airtel has been unable to even collect a cent.

Most of the links brought by Bonface were never implemented. Since Bonface was the Mr fix it for the Enterprise Director, according to insiders, he was rewarded with a special bonus in June 2018 worth Ksh250,000. Sales people are not on annual performance bonus and hence should not be paid bonus but commissions. Bonface never earned any commissions while working in the department.

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