Telkom contract sparks fraud charges

Telkom is at the centre of a bitter row for awarding contracts worth millions of rand to a company that allegedly used fraudulent empowerment credentials in its tender bid.

Kwezi Technologies, a black-owned information technology services provider, has accused its former partner, Amdocs South Africa, the local arm of global firm Amdocs Limited, of illegally using Kwezi’s information and that of two other empowerment partners to win Telkom contracts worth R870 million.

Business Report has not independently verified the amount, but according to Sipho Mahamba, the chairman of Kwezi Technologies and the Kwezi Group, which also has interests in mining and business links with Australian mining giant Rio Tinto, the amount was for three contracts.

The contracts allegedly involved services for Telkom’s fixed-line business and billing infrastructure for 8.ta, Telkom’s new cellphone company.

Amdocs Limited, a New York-listed company operating in more than 50 countries, via its UK public relations firm OneChocolate Communications, declined to comment.

Telkom, which over the past two years had received two letters from Kwezi’s legal representatives highlighting the situation, also declined to comment. “As the matter is largely a shareholders dispute and sub judice, Telkom cannot comment.” However, Babatunde Adekeye , a director of Mkhabela Huntley Adekeye, attorneys, notaries and conveyencers, said there was no legal action under way. “I’m not aware of any litigation.”

Adekeye confirmed two letters, one dated September 11, 2009, and addressed to Vincent Moyo, a senior manager of procurement at Telkom and one to former chief executive Reuben September on February 18, 2010, sent from his firm.

“About a year ago there was supposed to be a meeting.”

Adekeye said Telkom later called to cancel the meeting. Nothing further took place.

Moyo said company rules prohibited him from commenting, but he said: “I am aware of the issue, yes. It’s not new to me, but there’s potential legal action and I wouldn’t want to be caught in the middle of it. These people were exchanging lawyers’ letters among themselves.”

According to Mahamba, Amdocs, Kwezi and two other local companies, Waymark Infotech and Eratis Technologies, had formed a consortium, Amdocs South Africa Joint Enterprise (Asaje) on January 15, 2008, of which Amdocs had a controlling stake. Amdocs provides software and services for billing and customer relationship management.

The Asaje consortium fell apart a year after its inception as shareholders had failed to raise $40 million (R276m) each, the minimum requirement in the shareholder’s agreement.

Mahamba, who is also embroiled in a heated dispute with partners in an engineering joint venture, said Kwezi Group was considering litigation against Amdocs to gain what it believed was rightfully its share of the R870m.

In January 2009, the partners met and talked of incorporating a new entity but could not agree. “We had a number of exchanges. Some were not so pleasant.” In this time, Mahamba said Amdocs South Africa approached Telkom alone, claiming to be black economic empowerment compliant. Telkom insiders later alerted him to the irregularity.

Amdocs South Africa general manager Shlomi Moscovich declined to comment and referred queries to the parent company.

Pikie Monaheng, the managing director and chairman of Waymark refused to comment. - Asha Speckman