Vodacom Tanzania has been accused of causing Tsh11billion loss to the government over fraudulent use of network facilities.
In a statement issued to newsrooms, the telecommunication network noted that its Managing Director Hisham Hendi and other employees, who were arrested on Tuesday, have been charged with committing economic crimes.
However, they stated that the company has already filed a bail application for the arrested officials.
“A bail application for the individuals in police custody will be heard in the next few days,” the statement read.
The company also revealed that they had appointed South African Jacques Marais as acting managing director, following the arrest of their MD Egyptian Hisham Hendi and other executives.
Marais was appointed to, “ensure the company’s operations continue free of interruptions and has initiated an internal investigation into the matter.”
According to court documents, Mr Hendi, and the other executives, “ intentionally and willfully organized a criminal racket which caused the government to suffer a pecuniary loss.”
A court official divulged to Reuters that the executives were not allowed to enter a plea or apply for bail, and are being held in police custody until the case comes up on April 17.
Despite the harsh conditions the arrested individuals are being subjected to, the company has maintained that they will cooperate with the investigations.
Read: Rene Meza Poaches Two Key Airtel Tanzania Executives to Vodacom Tanzania
The arrest of Vodacom’s MD is claimed to be part of the government’s crackdown against companies that evade paying taxes.
In June 2018, two chief executives of mobile phone companies were charged with fraud as part of a crackdown.
Le Van Dai, managing director of Halotel Tanzania and Sherif El Barbary, managing director of Zanzibar Telecom Company (Zantel) were charged alongside four other suspects with conspiracy, fraud and tax evasion, causing the government losses of more than Tsh1.2 billion ($530,000).
The offenses included the use of unregistered SIM cards, operating without a license, illegally importing and installing communications equipment and fraudulent use of telecommunication networks.
Vodacom is Tanzania’s leading telecommunication company by the number of mobile subscribers.
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