A report by forensic company Gobodo has found that Cell C, SA's third network provider, must be held accountable for a R500 million subsidy.
Cell C secured R500 million from the Universal Services and Access Agency of South Africa (USAASA) to roll out broadband in an Eastern Cape municipality.
The deal was earlier this year questioned by United Democratic Movement leader Bantu Holimisa, who argued that Cell C had asked former communications minister Dina Pule for the funding, when neither government, nor USAASA had identified this project.
"In addition, there seems to have been no competitive bidding processes for it."
Business Times notes that the proposal stemmed from Mothibi Ramusi, a former employee at the Department of Communications, who now heads regulatory affairs for Cell C.
Busines Times reports the Gobodo report found that USAASA CEO Zami Nkosi believed that 100% subsidy was acceptable, when other enterprises that were aided by the fund received between 70% and 80% of their costs.
Gobodo said it appeared as if Nkosi wanted to push the deal through, says the paper. The project has been placed on hold, but the report recommended further investigation by the department into aspects such as insider trading and collusion, it reports.
In July, the department said it had tasked independent investigators to look into the allegations of possible corruption and maladministration at USAASA.
Cell C spokesperson, Karin Fourie, said it would cooperate with any probe, and that it acted under the terms of the Electronic Communications Act, the paper reports.
Update
Since publication of this article, Cell C has clarified that it did not receive any money from USAASA and its made a "transparent application" in terms of section 88 of the ECA. The operator says the investigation mentioned seems to be one into internal USAASA issues and not Cell C. "However, we will cooperate with authorities if requested to do so as we have acted completely within the law at all times."
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